Resoneffect Inc. has a degree of pretax cash flow operating leverage equal to 1.12. If the firm's EBITDA was $2,000 last year while its depreciation and amortization expense was $150 in the same year, then what was the firm's degree of accounting operating leverage?
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- Consider the following data (be careful there might be some "unnecessary" information). EBIT = 176 Interest expense = 10 Tax rate = 30% Depreciation = 38 Net working capital = 30 Increase in net working capital = 10 Beginning of period Net PP&E = 50 Capex = 16 What is the free cash flow of the firm that year?Ohio Steel has a degree of operating leverage of 2.9. The company predicted EBIT of $332,000 and EPS of $5.7 for the year. Actual EBIT were $284,000 and EPS were $2.42. What is the degree of financial leverage? What is the degree of total leverage? What were earnings before taxes (EBIT - Interest)? What was the company's gross profit (sales - variable costs)?1.A Assume that a Peruvian company, DMB LLC, just reported its earnings this year. The reported revenue was $10 million and the reported cost was $9 million. The discount rate is 8%. Mark ALL the CORRECT statements. For this question, profit = revenue - cost. Hint: Apply the Gordon Formula to the profits of the firm. a) If the profit is expected to be constant, the present value of all the company's future profits is $125 million. b) If the profit is expected to grow 3% annually, the present value of all the company's future profits is $20 million. c) If the profit is expected to grow 4% annually, the present value of all the company's future profits is $25.75 million. d) If the profit is expected to grow 6% annually, the present value of all the company's future profits is $50 million. e) If the profit is expected to grow 10% annually, the present value of all the company's future profits is negative.
- It is known that a firm’s Net Operating Profit After Tax (NOPAT) is $58,000 and its Economic Value Added (EVA) is $18,000. What is the firm’s Weighted Average Cost of Capital (WACC) if its debt is $150,000 and equity is $250,000?What is the firm's assets turnover?What is the FCFF of a firm with revenues of $229 million, operating profit margin of 47%, tax rate of 22%, depreciation and amortization expense of $29 million, capital expenditures of $31 million, acquisition expenses of $9 million and change in net working capital of $11 million? Answer in millions, rounded to one decimal place (e.g., $245,684,235 = 245.7). (Assume non- operating income and expenses are zero, so that EBIT = Operating income.) Type your numeric answer and submit
- Suppose a firm has the following information: Sales = $10million; costs of goods sold (excluding depreciation) = $5 million;depreciation = $1.4 million; other operating expenses = $2 million;interest expense = $1 million. If the tax rate is 25%, what is NOPAT,the net operating profit after taxes? ($1.2 million)A firm had a debt ratio of 0.85. The pretax cost of debt is 8% and the reqiured return on asset is 15.5%. What is the cost of equity if we factorin the firms tax rate of 24%? A) 19.53 B) 18.92 C) 21.57 D) 20.35 E) 20.96What is the firms ROE?
- Suppose Alcatel-Lucent has an equity cost of capital of 9.2%, market capitalization of $10.95 billion, and an enterprise value of $15 billion. Suppose Alcatel-Lucent's debt cost of capital is 6.9% and its marginal tax rate is 38%. a. What is Alcatel-Lucent's WACC? b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown here,? c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)? a. What is Alcatel-Lucent's WACC? Alcatel-Lucent's WACC is%. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 1 FCF ($ million) - 100 50 Print C Done 2 99 3 66 XSuppose Alcatel-Lucent has an equity cost of capital of 10.4%, market capitalization of $11.52 billion, and an enterprise value of $16 billion. Suppose Alcatel-Lucent's debt cost of capital is 6.6% and its marginal tax rate is 34%. a. What is Alcatel-Lucent's WACC? b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown here, ? c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)? a. What is Alcatel-Lucent's WACC? Alcatel-Lucent's WACC is 9.34 %. (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 FCF ($ million) 45 Print 0 - 100 Done 2 101 3 66 - XWhat is the firm roe ? Accounting