A firm will issue 800 million dollars of debt outstanding. …
A firm will issue 800 million dollars of debt outstanding. The firm says it will pay off 400 million of the debt at the end of one year and the other 400 million dollars at the end of year two. The interest rate is 5% and the tax rate is 25%. Assuming no chance of default and full use of tax deductions and ignoring personal taxes what is the present value of the tax savings (PVTS) from issuing this debt in millions of dollars. (Give answer rounded to at least the second decimal in millions of dollars: So, for example if answer is 1.243 million, your should write down 1.24 or 1.243)
Read DetailsThe Addy Corporation assembled the following data pertaining…
The Addy Corporation assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Addy heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. Month Cost Hours January $40,000 3,600 February 38,500 3,000 March 36,280 3,300 April 38,000 3,500 May 69,850 5,850 June 45,000 4,250 What is the estimated total cost at an operating level of 3,100 hours?
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