Barbell Company reported net operating income (NOI) equal to $180,000 this year. Examination of the company's...
Barbell Company reported net operating income (NOI) equal to $180,000 this year. Examination of the company's balance sheet and income statement shows that the tax rate was 35 percent, the depreciation expense was $50,000, $140,000 was invested in assets during the year, and invested capital currently is $1,200,000. If Barbell' average after-tax cost of funds is 9 percent, what is the firm's EVA?
Homework Answers
| EVA = NOPAT-(Invested capital*WACC) | |
| NOPAT = NOI*(1-t) = 180000*(1-35%) = | $ 1,17,000 |
| Invested capital = 1200000-140000 = | $ 10,60,000 |
| EVA = 117000-1060000*9% = | $ 21,600 |
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Barbell Company reported net operating income (NOI) equal to
$180,000 this year. Examination of the company's...
Casey Motors recently reported net income of $118 million. The firm's tax rate was 40 percent,...
Casey Motors recently reported net income of $118 million. The firm's tax rate was 40 percent, and interest expense was $40 million. The company's after-tax cost of capital is 13 percent, and the firm's total investor supplied operating capital employed equals $826 million. What is the company's EVA? (Answers are in $ millions.) $196.67 $118.00 $34.62 $142.00 $107.38
28. Casey Motors recently reported the following information Net income $600,000. " Tax rate = 40%....
28. Casey Motors recently reported the following information Net income $600,000. " Tax rate = 40%. Interest expense- $200,000. Total invested capital employed = $9 million. -After-tax cost of capital = 10%. What is the company's EVA? a. -198,000 b.-135,000 c. -203,400 d. -180,000 e. -216,000
Testbank, Question 63 The Grisham Company has reported the following information for 2012: Net operating income...
Testbank, Question 63
The Grisham Company has reported the following information for
2012:
Net operating income after tax (NOPAT) $1,200,000
Invested capital $7,500,000
Current liabilities $980,000
Weighted average cost of capital 16%
The company’s economic value added is:
$156,800
$220,000
$1,008,000
$851,200
10 Last year, our company's net operating income (NOI) was $3,700,000. Our Degree of Operating Leverage...
10 Last year, our company's net operating income (NOI) was $3,700,000. Our Degree of Operating Leverage (DOL) was 1.80. One of our major customers went out of business, and we expect our sales to decrease by 50.0%. Assuming the same cost structure, our DOL in the current year if sales decrease by 50.0% from last year is closest to 9.0 1.8 3.6 0.9 18.0
g3.6 Barton Industries has operating income for the year of $3,700,000 and a 25% tax rate....
g3.6
Barton Industries has operating income for the year of $3,700,000 and a 25% tax rate. Its total invested capital is $20,000,000 and its after-tax percentage cost of capital is 6%. What is the firm's EVA? Round your answer to the nearest dollar, if necessary.
Plough Company reported net income of $180,000 for the current year. Depreciation recorded on buildings and...
Plough Company reported net income of $180,000 for the current year. Depreciation recorded on buildings and equipment amounted to $80,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $20,000 $15,000 Accounts receivable 24,000 32,000 Inventories 50,000 65,000 Prepaid expenses 9,500 5,000 Accounts payable 12,000 18,000 Income taxes payable 1,600 1,200 Instructions Prepare the cash flows from the operating...
Bohemian Manufacturing Company reported sales of $820,000 at the end of last year, but this year,...
Bohemian Manufacturing Company reported sales of $820,000 at the end of last year, but this year, sales are expected to grow by 10%. Bohemian expects to maintain its current profit margin of 21% and dividend payout ratio of 10%. The following information was taken from Bohemian's balance sheet: Total assets: Accounts payable: Notes payable: Accrued liabilities: $400,000 $70,000 $35,000 $65,000 Based on the AFN equation, the firm's AFN for the current year is A positively signed AFN value represents: O...
Accustart Hospital is a division of Superior Healthcare that is organized as an investment center. In...
Accustart Hospital is a division of Superior Healthcare that is organized as an investment center. In the past year, the hospital reported an after-tax income of $3,550,000. Total interest expense was $1,680,000, and the hospital’s tax rate was 35 percent. Hospital assets totaled $34,800,000, and noninterest-bearing current liabilities were $11,000,000. Superior has established a required rate of return equal to 18 percent of invested capital. Calculate the residual income/EVA of Accustart Hospital. (Enter negative answers preceding either - sign, e.g....
Fuzzy Button Clothing Company reported sales of $720,000 at the end of last year; but this...
Fuzzy Button Clothing Company reported sales of $720,000 at the end of last year; but this year, sales are expected to grow by 8%. Fuzzy Buttonexpects to maintain its current profit margin of 21% and dividend payout ratio of 15%. The firm's total assets equaled $450,000 and were operated at full capacity. Fuzzy Button's balance sheet shows the following current liabilities: accounts payable of $70,000, notes payable of $25,000, and accrued liabilities of $70,000. Based on the AFN (Additional Funds...
During Denton Company's first two years of operations, the company reported absorption costing net operating income...
During Denton Company's first two years of operations, the company reported absorption costing net operating income as follows: Yon 2 $ 1,200,000 $ 1,890,000 Sales (@ $63 per unit) Cost of goods sold (@ $35 per unit) 700,000 1,050.000 560,000 840,000 Gross margin Selling and administrative expenses 312,000 342,000 Net operating income 248,000 498,000 * 53 per unit variable, 5252,000 fixed each year. The company's $35 unit product cost is computed as follows: 7 Direct materials Direct labor Variable manufacturing...
28. Casey Motors recently reported the following information Net income $600,000. " Tax rate = 40%. Interest expense- $200,000. Total invested capital employed = $9 million. -After-tax cost of capital = 10%. What is the company's EVA? a. -198,000 b.-135,000 c. -203,400 d. -180,000 e. -216,000
Testbank, Question 63
The Grisham Company has reported the following information for
2012:
Net operating income after tax (NOPAT) $1,200,000
Invested capital $7,500,000
Current liabilities $980,000
Weighted average cost of capital 16%
The company’s economic value added is:
$156,800
$220,000
$1,008,000
$851,200
10 Last year, our company's net operating income (NOI) was $3,700,000. Our Degree of Operating Leverage (DOL) was 1.80. One of our major customers went out of business, and we expect our sales to decrease by 50.0%. Assuming the same cost structure, our DOL in the current year if sales decrease by 50.0% from last year is closest to 9.0 1.8 3.6 0.9 18.0
g3.6
Barton Industries has operating income for the year of $3,700,000 and a 25% tax rate. Its total invested capital is $20,000,000 and its after-tax percentage cost of capital is 6%. What is the firm's EVA? Round your answer to the nearest dollar, if necessary.
Bohemian Manufacturing Company reported sales of $820,000 at the end of last year, but this year, sales are expected to grow by 10%. Bohemian expects to maintain its current profit margin of 21% and dividend payout ratio of 10%. The following information was taken from Bohemian's balance sheet: Total assets: Accounts payable: Notes payable: Accrued liabilities: $400,000 $70,000 $35,000 $65,000 Based on the AFN equation, the firm's AFN for the current year is A positively signed AFN value represents: O...
Fuzzy Button Clothing Company reported sales of $720,000 at the end of last year; but this year, sales are expected to grow by 8%. Fuzzy Buttonexpects to maintain its current profit margin of 21% and dividend payout ratio of 15%. The firm's total assets equaled $450,000 and were operated at full capacity. Fuzzy Button's balance sheet shows the following current liabilities: accounts payable of $70,000, notes payable of $25,000, and accrued liabilities of $70,000. Based on the AFN (Additional Funds...
During Denton Company's first two years of operations, the company reported absorption costing net operating income as follows: Yon 2 $ 1,200,000 $ 1,890,000 Sales (@ $63 per unit) Cost of goods sold (@ $35 per unit) 700,000 1,050.000 560,000 840,000 Gross margin Selling and administrative expenses 312,000 342,000 Net operating income 248,000 498,000 * 53 per unit variable, 5252,000 fixed each year. The company's $35 unit product cost is computed as follows: 7 Direct materials Direct labor Variable manufacturing...
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