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Tank Ltd is considering undertaking the purchase of a new piece of equipment that is expected to increase pre-tax income(EBITDA) by $7,000 each year for the next 5 years. It costs $30,000 to purchase today and for tax purposes must be depreciated down zero over its 8 year useful life using the straight-line method. If Tank is actually forecasting a salvage (for capital budgeting purposes) of $15,000 after 5 years, what is the machine's net cash flow (after tax) for year 5? Assume the tax rate is 30%.
NB: EBITDA is "Earnings Before Interest, Taxes, Depreciation and Amortisation"
Next year ABC healthcare organization will serve 100 patients in the following manner. 30 Medicare Patients who pay charges less 30%/diagnosis. 20 Medicaid patients who pay charges less 30% per diagnosis. Calculate the increase in volume necessary to..
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If the cost of goods solds is expected to change this year from 258,000 to 279,000, by how much will inventory change?
The standard deviation of monthly changes in the spot price of live cattle is (in cents per pound) 1.35. The standard deviation of monthly changes in the futures price of live cattle for the closest contract is 0.8. The producer wants to use the Dece..
Greenbloom Garden Centres is a large public company whose shares trade on the TSX. The Greenbloom family owns 51% of the company’s shares, and the remainder are widely held. Discuss how information risk may differ for an audit of a public company vs...
You deposit $100,000 cash in a brokerage account and short sell $180,000 of stocks. Later, the value of the stocks held short rises to $270,000, whereupon you get nervous and close your account. What is the percentage return on your investment?
No dividends will be paid on the stock over next nine years because firm needs to plow back its earnings to fuel growth. what is the current share price?
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