You are provided with the following information on Kayray Corporation. Your ultimate objective is to calculate the EVA for the firm. LIFO reserve 60 Net plant, property, and equipment 1,325 Other assets 30 Goodwill 325 Accumulated Goodwill amortized 65 PV of Operating leases 140 Tax benefit from interest on expenses 10 Tax benefit from interest on leases 5 Taxes on non-operating income 2 Implied interest on op. lease 9.5 Increase in LIFO reserve 12 Goodwill amortization 15 Operating profit 550 Income tax expense 215 Net working capital 440 WACC 0.12 Refer to Exhibit 9.15. Calculate the adjusted operating profits before taxes. a. $586.5 b. $225.64 c. $825.23 d. $692.5 e. $831.56
You are provided with the following information on Kayray Corporation. Your ultimate objective is to calculate the EVA for the firm. LIFO reserve 60 Net plant, property, and equipment 1,325 Other assets 30 Goodwill 325 Accumulated Goodwill amortized 65 PV of Operating leases 140 Tax benefit from interest on expenses 10 Tax benefit from interest on leases 5 Taxes on non-operating income 2 Implied interest on op. lease 9.5 Increase in LIFO reserve 12 Goodwill amortization 15 Operating profit 550 Income tax expense 215 Net working capital 440 WACC 0.12 Refer to Exhibit 9.15. Calculate the adjusted operating profits before taxes. a. $586.5 b. $225.64 c. $825.23 d. $692.5 e. $831.56
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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You are provided with the following information on Kayray Corporation. Your ultimate objective is to calculate the EVA for the firm.
|
LIFO reserve |
60 |
|
Net plant, property, and equipment |
1,325 |
|
Other assets |
30 |
|
|
325 |
|
Accumulated Goodwill amortized |
65 |
|
PV of Operating leases |
140 |
|
Tax benefit from interest on expenses |
10 |
|
Tax benefit from interest on leases |
5 |
|
Taxes on non-operating income |
2 |
|
Implied interest on op. lease |
9.5 |
|
Increase in LIFO reserve |
12 |
|
Goodwill amortization |
15 |
|
Operating profit |
550 |
|
Income tax expense |
215 |
|
Net working capital |
440 |
|
WACC |
0.12 |
Refer to Exhibit 9.15. Calculate the adjusted operating profits before taxes.
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