1 assume a firm has earnings before depreciation and taxes, Ask an Expert

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1. Assume a firm has earnings before depreciation and taxes of $640,000 and no depreciation. It is in a 35 percent tax bracket.

1. Compute its cash flow

2. Assume it has $640,000 in depreciation. Recompute its cash flow.

3. How large a cash flow benefit did the depreciation provide?

2. Matis corporation invest 1,500,00 South African rand as a nominal interest rate of 10 perent. At the tmime the investment is made, the spot rate of the rand is USD 0.205. If the spot rate of the rand at maturity of the investment is USD 0.203, what is the effective yield of investing in rand?

A. 11.08 percent

B. 8.92 percent

C. 10.00 percent

D. 12.50 percent

E. none of the above

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92749075

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