problem1. A firm has profit margin of 4% and equity multiplier of 1.5. Its sales are $250 million, and it has total asset of $75 million. What is its ROE describe?
problem2. Consider an asset which costs $624,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a 5 year project; at the end of the project, the asset can be sold for $173,000. If the relevant tax rate is 35 percent, what is after-tax cash flow from sale of this asset?
problem3. Jake Smith opened his Balinese coffee shop business in the downtown Boise on January 1st 2010. On December 31st, 2010, he sat down with his accountant to figure out how his business had done in its 1st year and heaved a sigh of relief when his accountant reported that his EBT came to $20,000. Revenues, at $1,050,000 looked good. His expenditures were as follows: Salaries and benefits paid to employees $210,000 Jake's own salary $100,000 Supplies (coffee, milk, tea, pastries, etc.) $620,000 Cost of Restaurant grade coffee machine $30,000 Miscellaneous operating costs $44,000 Interest on loan $12,000 How much did Jake's accountant assigned for depreciation and amortization?
a. $44,000
b. $14,000
c. $4,000
d. $0.00