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Question
Allston-Brighton Corp. has total assets of $10 million, total liabilities of $4 million, of which $1 million are non-interest bearing. Interest expense was $180,000. Earnings before interest and taxes were $2.5 million. Depreciation was $1.5 million. Compute the following ratios: Debt ratio, Interest-bearing debt ratio, Times interest earned ratio, and EBITDA coverage ratio.Answer
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Related questions
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A) The net present value.
B) The internal rate of return.
C) The profitability index.
D) The modified internal rate of return.
Q:
Initial Outlay Cash Flow in Period
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A) 10%.
B) 18%.
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D) 16%.
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Cash flows: Year 1 = $5,000
Year 2 = $3,000
Year 3 = $9,000
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The equivalent annual cost method is most appropriate in which of the following situations? In each case, assume that several mutually exclusive options are available.
A) Introducing a new product line
B) Adding another store to a chain of retail stores
C) Installation of federally mandated safety equipment
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WSU Inc. has various options for replacing a piece of manufacturing equipment. The present value of costs for option Ell is $84,000. Option Ell has a useful life of 5 years; annual operating costs were discounted at 9%. What is the equivalent annual cost?
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The size of capital investments and the difficulty in reversing them once they are made make capital-budgeting decisions very important to the firm.
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Competitive market forces make it imperative for a firm to have a systematic strategy for generating capital-budgeting projects.
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Good capital investment opportunities are most likely to exist when:
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B) 36%.
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D) 5.5%.
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If the ROE on a new investment is less than the firm's required rate of return:
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B) the investment leaves the firm's value unchanged.
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Draper Company's common stock paid a dividend last year of $3.70. You believe that the long-term growth in the dividends of the firm will be 8% per year. If your required return for Draper is 14%, how much are you willing to pay for the stock?
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The ________ designates the date on which the stock transfer books are closed in regard to a dividend payment.
A) declaration date
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C) date of record
D) payment date
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