What are the cash flows to becky under each scenario

Reference no: EM13297486

Becky Reynolds is the owner, president, and primary salesperson for Chicken Dumplings. Because of this, the company's profits are driven by the amount of work Becky does. If she works 40 hours each week, the company's EBIT will be $350,000 per year, and if he works a 50-hour week, the company's EBIT will be $450,000 per year. The company is currently worth $2.31 million. The company needs a cash infusion of $1.58 million, and it can issue equity or issue debt with an interest rate of 7 percent. Assume there are no corporate taxes. What are the cash flows to Becky under each scenario? (Do not include the dollar signs ($). Round your answers to the nearest whole dollar amount. (e.g., 36))

Reference no: EM13297486

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