EBK PERSONAL FINANCE TAX UPDATE
13th Edition
ISBN: 9780357438930
Author: FORGUE
Publisher: VST
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Question
Chapter 6, Problem 3DTM
(a)
Summary Introduction
Case summary: Person CM who got graduated with a degree in food science and is employed with consumer food company and earning 70,000 annually with $58,000 take-home pay. Person CM pays monthly rent of $1,100. The person CM has loan of $38,000 for which she pays $385 monthly. She has current debt of $8000 on which monthly pay is $240 and has assets of $14,000.
Character in the case: Person CM
Adequate information:The person CM has loan of $38,000 for which she pays $385 monthly. She has current debt of $8000 on which monthly pay is $240 and has assets of $14,000. Monthly rent is $1,100. Annual income 70,000 and net income is $58,000. To determine: Debt payment to disposable income ratio.
(b)
Summary Introduction
Case summary: Person CM who got graduated with a degree in food science and is employed with consumer food company and earning 70,000 annually with $58,000 take-home pay. Person CM pays monthly rent of $1,100. The person CM has loan of $38,000 for which she pays $385 monthly. She has current debt of $8000 on which monthly pay is $240 and has assets of $14,000.
Character in the case: Person CM
Adequate information:The person CM has loan of $38,000 for which she pays $385 monthly. She has current debt of $8000 on which monthly pay is $240 and has assets of $14,000. Monthly rent is $1,100. Annual income 70,000 and net income is $58,000. To determine: Debt to total income ratio.
(c)
Summary Introduction
Case summary: Person CM who got graduated with a degree in food science and is employed with consumer food company and earning 70,000 annually with $58,000 take-home pay. Person CM pays monthly rent of $1,100. The person CM has loan of $38,000 for which she pays $385 monthly. She has current debt of $8000 on which monthly pay is $240 and has assets of $14,000.
Character in the case: Person CM
Adequate information:The person CM has loan of $38,000 for which she pays $385 monthly. She has current debt of $8000 on which monthly pay is $240 and has assets of $14,000. Monthly rent is $1,100. Annual income 70,000 and net income is $58,000. To discuss: the Person CM’s debt situation along with her debt usage during college times.
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QUESTION #1:
A) What is the Net Operating Profit After Tax (NOPAT) for 2024?B) What is the Operating Cash Flow for 2024?
C) What is the Free Cash Flow for 2024?
Note: Marketable securities are non-operating current assets, and short-term debt (bank loan) is a non-operating current liability. Both of these items are excluded from the calculation of net operating working capital.
D) If the stock trades for $85 per share at the end of 2024, and there are 315,000 shares outstanding, what is the MVA in 2024?
E) Given that the firm’s WACC is 14%, what is the EVA during 2024?
F) Create common size income statement and balance sheet for 2024, 2023 and 2022.
G) Using 2022 as the base year, create income statement and balance sheet percentage change analysis for 2024 and 2023.
QUESTION #2:
In addition to the AAA Ltd. financial statements in Problem One, you are given more information as follows.
Sales are forecast to increase by 80% in 2025.
Short-term Debt, Long-term Debt, and Common…
Brightwoodę Furniture provides the following financial data for a
given enod:
Sales
Less Variable E
Contribwaon Margin
Less Fixed Expenses
et Income
-
Aount ($) Per Unit ($)
150,000
3
L96,000
13
10
35,000
25,000
a. What is the company's CM ratio?
b. If quarterly sales increase by $5,200 and there is no change in fixed
expenses, by how much would you expect quarterly net operating
income to increase?
Chapter 6 Solutions
EBK PERSONAL FINANCE TAX UPDATE
Ch. 6.1 - Prob. 1CCCh. 6.1 - Prob. 2CCCh. 6.1 - Prob. 3CCCh. 6.1 - Prob. 4CCCh. 6.2 - Distinguish among the continuous debt method,...Ch. 6.2 - Prob. 2CCCh. 6.2 - Prob. 3CCCh. 6.2 - Prob. 4CCCh. 6.3 - Prob. 1CCCh. 6.3 - Prob. 2CC
Ch. 6.3 - Prob. 3CCCh. 6.3 - Prob. 4CCCh. 6.3 - Prob. 5CCCh. 6.4 - Prob. 1CCCh. 6.4 - Prob. 2CCCh. 6.4 - Prob. 3CCCh. 6.4 - Distinguish between Chapter 7 and Chapter 13...Ch. 6 - Prob. 1DTMCh. 6 - Buying a Vacation Home. Barrie and Inga Adlington,...Ch. 6 - Prob. 3DTMCh. 6 - The Johnsons Attempt to Resolve Their Credit and...Ch. 6 - Victor and Maria Advise Their Niece Victor and...Ch. 6 - Julia Price Thinks About a Loan to Buy an Inboard...Ch. 6 - Prob. 4FPCCh. 6 - Cousins Discuss Their Debt Situations Melinda...Ch. 6 - Prob. 6FPC
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