Amount of interest expense reported by benson corporation

Assignment Help Financial Management
Reference no: EM13947069

Benson Corporation announced that its net income for the year ended June 30, 2015 is $1,400,000. The company also reported EBITDA of $5,000,000, and depreciation and amortization expense of $1,250,000. If the company's income tax rate is 50 percent, what is the amount of interest expense reported by Benson Corporation? Schedule

Reference no: EM13947069

Questions Cloud

What is the firms net income : Alpha Corporation has a return on equity (ROE) of 18.70 percent, an equity multiplier of 2.50, sales of $2,750,000, and a total assets turnover of 2.75. What is the firm's net income?
Cost of materials and labor needed to generate these revenue : Rocky Mountain Lumber Company is considering purchasing a new wood saw that costs $50,000. The saw will generate revenues of $100,000 per year for four years.  Rocky Mountain’s tax rate is 34 percent, and its opportunity cost of capital is 10 percent..
Business owners are protected by limited liability : Which of the following business owners are protected by limited liability?
Pay off her loan ahead of schedule : Skylar Masterson borrowed $250,000 to buy her first home at an annual interest rate of 12 percent with monthly payments for 30 years. Ms. Masterson would like to pay off her loan ahead of schedule. What is the remaining unpaid balance when there are ..
Amount of interest expense reported by benson corporation : Benson Corporation announced that its net income for the year ended June 30, 2015 is $1,400,000. The company also reported EBITDA of $5,000,000, and depreciation and amortization expense of $1,250,000. If the company's income tax rate is 50 percent, ..
Productivity improvements save it in direct labor costs : Refer to the HR Reports in the Inquirer. Through past investments in recruiting and training Chester has obtained a productivity index of 109.4%. This means that Chester's labor costs would be increased by 9.4% if it did not have these productivity i..
What is the interest rate on this loan : You would like to buy a used car. You borrow $8,000 from your uncle and agree to repay the loan at the end of three years in a one-time payment of $9,250. What is the interest rate on this loan?
An investment that pays the same amount at the end : An investment that pays the same amount at the end of each year for a fixed amount of time is called __________. A. an annuity due B. a perpetuity C. an excess cash flow D. an ordinary annuity
Calculate the company cost of capital : The market value of Charter Cruise Company's equity is $15 million and the market value of its debt is $5 million. If the required rate of return on the equity is 20% and that on its debt is 8%, calculate the company's cost of capital. (Assume no tax..

Reviews

Write a Review

Financial Management Questions & Answers

  Residual dividend policy-what will be total dividend payment

The Mallie Company has planned capital expenditures that total $2,000,000. The Mallie Company wants to maintain a target capital structure that is 35% debt and 65% equity. The Mallie Company forecasts that its net income this year will be $1,800,000...

  Sales increase-having to raise funds externally

Pierce Furnishings generated $2 million in sales during 2012, and its year-end total assets were $1.4 million. Also, at year-end 2012, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,..

  A project will incur the cash flows

An initial cost of 1 million, an annual cost of 40,000 starting the end of year 4 and runing through the end of year 10, and a receipt of 200,000 at the end of the years 1thru3 and 5 thru 10. The MARR is 10%. Draw the cash flow diagram for this proje..

  Discuss each of the three competitive advantage strategies

Discuss each of the three competitive advantage strategies (operational excellence, product leadership, customer intimacy) and explain why most firms pursue only one of these strategies.

  Purchase a currency option to purchase

Today's date is 1st December 2011. Reynolds Manufacturing has just imported $500,000 of Raw materials from an American company with payment due in three months time. The board are concerned about the adverse economic news relating to the UK econom..

  Inventory-working capital to expand into new market

Imagine A Better Company LLC, which has six members. Five of the shareholders own 7 percent each. Jacinta owns the remaining portion of the company. A Better Company needs $250,000 for equipment, inventory, and working capital to expand into a new ma..

  The company projected a financing surplus

You constructed a pro forma balance sheet for next year and found that external financing required was negative (i.e., the company projected a financing surplus). Which of the following options, all else equal, would NOT correct the projected imbalan..

  What is the value of preferred stock

Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 8% of its $100 par value. Preferred stock of this type currently yields 7%. Assume dividends are paid annually. What is the value of Rolen's preferred stock?

  Explain cost increases occur annually

Assume cost increases occur annually. Both clients will simultaneously enter care facilities at age 77, spend three years in assisted living and one year in nursing care, and die at age 81.

  Firms debt-equity ratio after the switch

Sewing World had an all equity cost of capital of 12 percent. When the firm switched to being levered its cost of equity increased to 13.4 percent and its pretax cost of debt was 7.5 percent. What was the firm's debt-equity ratio after the switch? Ig..

  The total return of the portfolio reduced by trading costs

Suppose that every time a fund manager trades stock, transaction costs such as commissions and bid–ask spreads amount to 1.9% of the value of the trade. If the portfolio turnover rate is 50%, by how much is the total return of the portfolio reduced b..

  Analyst will make regarding the investment opportunity

An analyst evaluting the North facility expects that the project will be financed by debt that costs the firm 7%. What recommendation do you think this analyst will make regarding the investment opportunity? Another analyst assigned to study the Sout..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd