Patterson Brothers recently reported an EBITDA of $12.5 million and net income of $3.75 million. It had $1.5 million of interest expense, and its corporate tax rate was 25%. Whatwas its charge for depreciation and amortization? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Do not round Intermediatecalculations. Round your answer to the nearest dollar, if necessary.$

Depreciation:Depreciation and amortization are critical accounting methods for methodically…

Answered: Patterson Brothers recently reported an…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Tubby Toys estimates that its new line of rubber ducks will generate sales of $6.40 million, operating costs of $3.40 million, and a depreciation expense of $0.40 million. If the tax rate is 40%, what is the firm’s operating cash flow? Note: Do not round your intermediate calculations. Enter your answer in millions rounded to 2 decimal places. Firms Operating Cash Flow = ______ Million
Last year, Cayman Corporation had sales of $7 million, total variable costs of $2 million, and total fixed costs of $1 million. In addition, they paid $480,000 in interest to bondholders. Cayman has a 21% marginal tax rate. If Cayman's sales increase 6%, what should be the increase in operating income? SET YOUR CALCULATOR TO 4 DECIMAL PLACES. ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE % SIGN. FOR EXAMPLE, IF YOUR ANSWER IS 9.4567, ENTER IT AS 9.46. 420,000
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A firm is considering an investment in new equipment that has the following information. Purchase Cost: $123,829 and the equipment will have no salvage value at the end of its five year life. Annual accounting profit is $30,899 Calculate the Accounting Rate of Return, ie the ARR. Express your answer as a percentage with two decimal places
A company buys a machine for $69,000 that has an expected life of 7 years and no salvage value. The company anticipates annual income of $3,300, with the cash flows to be received evenly throughout each year. What is the accounting rate of return?
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Ziebart Corp.'s EBITDA last year was $345,000 ( = EBIT + depreciation + amortization), its interest charges were $9,500, it had to repay $26,000 of long-term debt, and it had to make a payment of $17,400 under a long-term lease. The firm had no amortization charges. What was the EBITDA coverage ratio? Select the correct answer. a. 4.63 b. 7.59 c. 6.11 d. 6.85 e. 5.37
Assume Lasher’s Kitchen has pretax earnings of $150,000 after depreciation expense of $30,000. If the firm’s tax rate is 25 percent, what is its cash flow from operations? Round your answer to the nearest dollar. $
A. Yummy Cake Corporation has current assets of $210,000, total assets of $310,000, current liabilities of $230,000, and total liabilities of $245,000. The company is trying to obtain a bank loan for $65,000 which would be financed over six months. The terms of the loan agreement specify that the company's current ratio cannot fall below 1.5. Calculate the current ratio before and after the loan. Do you think the loan will be granted? Explain why? B. Low Carb Corp. has current assets of $320,000, total assets of $400,000, current liabilities of $95,000, and total liabilities of $200,000. The company is trying to negotiate a bank loan of $60,000. The terms of the loan require repayment over two years and state that the debt ratio cannot exceed 0.60. Calculate the debt ratio before and after the bank loan. Do you think the loan will be granted? Explain why.
Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $18 million, and production and sales will require an initial $3 million investment in net operating working capital. The company's tax rate is 25 %. Enter your answers as a positive values. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answers to two decimal places. Please show all work and solutions. Show all work.
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Click here to read the eBook: The Income Statement INCOME STATEMENT Patterson Brothers recently reported an EBITDA of $11.5 million and net income of $2.8 million. It had $2.0 million of interest expense, and its corporate tax rate was 30%. What was its charge for depreciation and amortization? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. Do not round intermediate calculations. $

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