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This is due tomorrow morning at 8 am central time. please help!

This problem set ses a bit long (35 questions) but in fact it is very simple! . The first 30 questions will help you understa
Income statement 2016 5510 4542 425 82 Sales Cost of goods sold SG&A expense Depreciation Interest expense Interest income In
QUESTION 1 Find: EBIT in 2017 QUESTION 2 EBIT in 2018 QUESTION 3 EBT in 2017 QUESTION 4 EBT in 2018 QUESTION 5 Income tax in
QUESTION 6 Income tax in 2018 QUESTION 7 Tax rate in 2017 answer in percentage) QUESTION 8 Tax rate in 2018 answer in percent
QUESTION 11 Depreciation in 2017 QUESTION 12 Depreciation in 2018 QUESTION 13 Net PPE in 2016 QUESTION 14 Net PPE in 2017 QUE
QUESTION 16 CAPEX in 2017 QUESTION 17 CAPEX in 2018 QUESTION 18 Operating CA (Current Assets) in 2016 QUESTION 19 Operating C
QUESTION 21 Operating CL (Current Liabilities) in 2016 QUESTION 22 Operating CL (Current Liabilities) in 2017 QUESTION 23 Ope
QUESTION 26 NWC in 2018 QUESTION 27 Increase in NWC in 2017 QUESTION 28 Increase in NWC in 2018 QUESTION 29 FCF in 2017 QUEST
Assume that FCF grows at 2% in perpetuity after 2018. What is the terminal value (ie the present value (as of 2018) for FCFs
QUESTION 34 Suppose that the market value of the firms total liabilities is $1240. What is the market value of equity? A $18
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Answer #1

Answer

Calculation of Income before taxes & Income tax

Income Statement

Particulars

2016

2017

2018

(a)

Sales

5510

6040

6530

(b)

Less: Cost of goods sold

4542

5051

5366

(c)

Less: SG&A expense

425

435

485

(d)

Less: Depreciation

82

74

69

(e)

Less: Interest expense

65

42

53

(f)

Add: Interest income

4

2

3

(g)

Income before taxes

400

440

560

(h)

Less: Income tax

160

176

224

Net income/(loss)

240

264

336

EBIT – it stands for Earnings before Interest & Taxes. EBIT is a purely operating income before taxes. We can calculate EBIT by adding interest expenses and tax expenses back to net income and by deducting interest income from net income.

Calculation of EBIT

Particulars

2016

2017

2018

(a)

Net Income (given above)

240

264

336

(b)

Add: Interest Expense

65

42

53

(c)

Add: Income Tax

160

176

224

(d)

Less: Interest Income

4

2

3

EBIT

461

480

610

EBT – it stands for Earnings before taxes. We can calculate it by adding tax expenses back to the net income.

Calculation of EBT

Particulars

2016

2017

2018

(a)

Net Income (given above)

240

264

336

(b)

Add: Tax Expense

160

176

224

EBT

400

440

560

Final Answers:

  1. EBIT in 2017        -              480
  2. EBIT in 2018        -              610
  3. EBT in 2017          -             440
  4. EBT in 2018          -             560
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