Question: 1 Last year Simplex Robotics had 8 million in operating
1 Last year, Simplex Robotics had $8 million in operating income (EBIT). The company had net depreciation expense of $2 million and an interest expense of $1 million; its corporate tax rate was 32 percent. The company has $12 million in current assets and $5 million in non-interest-bearing current liabilities; it has $18 million in net plant and equipment. It estimates that it has an after-tax cost of capital of 10 percent. Assume that Simplex’s only non-cash item is depreciation. What was the company’s EVA?
Relevant QuestionsYou are considering installing an energy-efficient central heating system in your firm’s warehouse. The installation will cost $12,000, and you estimate total savings of $3,000 per year. The heating system will depreciate ...A study analyzed the behavior of the stock prices of firms that had lost antitrust cases. Included in the diagram are all firms that lost the initial court decision, even if the decision was later overturned on appeal. The ...Lone Star Industries just issued $195,000 of perpetual 9 percent debt and used the proceeds to repurchase stock. The company expects to generate $83,000 of EBIT in perpetuity. The company distributes all its earnings as ...The shareholders’ equity accounts or Hexagon International are shown here: Common stock ($1 book value)........ $ 30,000 Capital surplus................185,000 Retained earnings..............627,500 Total ...Show that the value of a right can be written as Value of a right = PRO − PX = (PRO − PS)/(N + 1) Where PRO, PS, and PX stand for the rights-on price, the subscription price, and the ex rights price, respectively, and N ...
Post your question