Suppose Congress changed the tax laws so that Berndt's depreciation expenses doubled. No changes in operations occurred.
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Do you work? Sample Size Will you purchase over the Intermet in the next TWo MONTHS? Yes Yes No Difference 407 193 18.2% 35.8% 17.6% Income Statements Sales Cost of goods sold except depr. 2,864,000 Depreciation and amortization Other expenses Total operating costs EBIT Interest expense EBT Taxes (40%) Net income 2012 2013 2014 $3,432,000 $5,834,400 $7,035,600 5,800,000 120,000 612,960 $3,222,900 $5,816,960 $6,532,960 4,980,000 116,960 720,000 18,900 340,000 $17,440 176,000 $146,600 ($158,560) -63,424 $209,100 62,500 80,000 $422,640 169,056 $253,584 58,640 2014 Other Data Stock price Shares outstanding EPS DPS Tax rate Book value per share Lease payments 2012 2013 $8.50 100,000 S0.88 $0.22 40% $6.64 $40,000 $6.00 100,000 ($0.95) 0.11 45% $5.58 $40,000 $12.17 250,000 $1.104 0.22 40% $7.909 $40,000 2014 Other Data Stock price Shares outstanding EPS DPS Tax rate Book value per share Lease payments 2012 2013 $8.50 100,000 S0.88 $0.22 40% $6.64 $40,000 $6.00 100,000 ($0.95) 0.11 45% $5.58 $40,000 $12.17 250,000 $1.104 0.22 40% $7.909 $40,000
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Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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