flows over the project’s life because of its effect on taxes. Depreciation is an expense item and‚ the more depreciation incurred‚ the larger are expenses. Thus‚ accounting profits become lower and in turn‚ so do taxes which are a cash flow item. 3. When evaluating a capital budgeting proposal‚ sunk costs are ignored. We are interested in only the incremental after-tax cash flows‚ or free cash flows‚ to the company as a whole. Regardless of the decision made on the investment at hand‚ the sunk
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This work of FIN 370 Week 2 Discussion Questions shows the solutions to the following points: 1. What are the differences between strategic and financial planning? What financial problems might an organization encounter when implementing their strategic plan? 2. What is the relationship between an operating budget and a cash budget? Why is it important for an organization to prepare a cash budget? 3. What decisions does the breakeven point help an organization to make? 4. How would you explain
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financed with equity. Firm B also has $20‚000 in assets‚ financed by $10‚000 in debt (with a 10 percent rate of interest) and $10‚000 in equity. Both firms sell 30‚000 units at a sale price of $4.00 per unit. The variable costs of production are $3 per unit. Fixed production costs are $25‚000. (assume no income tax.) a. What is the operating income (EBIT) for both firms? Sales revenue for both firms= $120‚000 Variable cost for both firms= $90‚000 Fixed costs for both firms= $25‚000 EBIT=
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00 years C. 8.65 years D. 17.29 years E. 16.00 years BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 2 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 006 #84 SECTION: 6.1 TOPIC: TIME TO MATURITY TYPE: PROBLEMS 3. Which one of the following is a correct method of computing the Du Pont identity? A. (Return on equity) [pic] (Equity multiplier) B. (Return on assets) [pic] (Total asset turnover) C. (Equity multiplier) [pic] (Profit margin) [pic] (Return on assets)
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Assessment of Hewlett Packard Ethics and Compliance HP has been noted to be one of the chief corporations in the area of computer technologies. Ethisphere Institute naming HP as one of the 2009 World’s Most Ethical Companies (HP Global Citizenship: Ethics and compliance‚ n.d.) was one of the companies latest accomplishments. HP had to make numerous in-house changes in order to acquire an ethical award brought about by ethical mishaps. Noted in Markkula Center (2007)‚ HP unethical corporate conduct
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| | |School of Business | | |FIN/370 Version 7 | | |Finance for Business | Copyright © 2012‚ 2011
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Learning Team: Current Market Conditions Competitive Analysis Tina Beauro‚ Nerkeda Butler and Laninga Spencer ECO/365 December 4‚ 2013 H. Todd Young Learning Team: Current Market Conditions Competitive Analysis This paper will give a short history and descriptions of Apple’s I Pad minicomputer. It will also give factors that affect demand‚ supply‚ and equilibrium prices in the market. Issues that Apple faces that affect its competitiveness will also be addressed. Lastly‚ this paper will identify
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Definitions Steven Puryear Fin 370 10-6-2011 Mrs. Watson Definitions 1. Finance- The science of funds management. 2. Efficient Market- A market in which the values of all assets and securities at any instant in time fully reflect all available information‚ which results in the market value and the intrinsic value being the same. 3. Primary Market- A market in which new‚ as opposed to previously issued‚ securities are traded. The primary market provides the channel for sale of new
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Total investor-supplied operating capital employed = $9 million. After-tax cost of capital = 10%. What is the company’s EVA? = EBIT (1-T)-(Total investor supplied *After tax percent per capital) = 600000(1-.40)–(9000000*.10) = -540000 3. Kwok Enterprises has the following income statement. Sales $2‚250 Costs 1‚400 Depreciation 250 EBIT $ 600 Interest expense 70 EBT $ 530 Taxes (40%) 212 Net income $ 318 What is the firm’s after-tax operating income
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This work contains FIN 370 Week 5 Individual Assignment Prepare a response to problem 3 located in Chapter 21 of the Basic Finance: An Introduction to Financial Institutions‚ Investments‚ and Management text by Mayo. Business - Finance Prepare a response to Problem 1 in Ch. 20 of Basic Finance . (NOT Ch. 20 of Financial Management) Everyone knows how important a college degree is‚ but many people don’t fully understand how to start on the path to achieving one. Between picking
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