Project #3717 - practical Financial Management Quiz #

# 5. Construct a pro forma income statement for the first year and second year for the following assumptions:

  • Units of Sales in Year 1: 100,000
  • Price per Unit: $10
  • Variable cost per unit: 30%
  • Fixed Costs: $120,000
  • Income taxes: 15%
  • Interest Expense: $200,000
  • In year 2, Price per unit increases to $11.50, and unit of sales increases by 3%, all other assumptions remain the same.

# 6.  Calculate the sustainable growth based on the following information:

• Earnings after taxes = $35,000
• Equity = $100,000
• d=22.4%

 

# 7.  Calculate a table of interest rates for 5 years based on the following information:

  • The pure interest rate is 2%
  • Inflation expectations for year 1 = 3%, year 2 =4%, years 3-5 =5%
  • The default risk is .1% for year one and increases by .1% over each year
  • Liquidity premium is 0 for year 1 and increases by .2% each year
  • Maturity risk premium is 0 for years 1 and 2 and .3% for years 3-5

Subject Business
Due By (Pacific Time) 04/01/2013 10:00 am
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy