Green Tea House has a tax rate of 25 percent and an interest tax shield valued at $8,046 for the year. How much did the firm pay in annual interest?
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Green Tea House has a tax rate of 25 percent and an interest tax shield valued at $8,046 for the year. How much did the firm pay in annual interest?
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- The firm incurs $70,000 in interest expenses each year. If the tax rate of the firm is 30%m what is the effective after-tax interst rate expense for the firm?A firm incurs $70,000 in interest expenses each year. If the tax rate of the firm is 30%, what is the effective after-tax interest rate expense for the firm?Vonte Company has a 21 percent tax rate. Its total interest payment for the year just ended was $19.1 million. What is the interest tax shield?
- Suppose a firm's tax rate is 25%. a. What effect would a$9.85 million operating expense have on this year's earnings? What effect would it have on next year's earnings? b. What effect would an $8.95million capital expense have on this year's earnings if the capital is depreciated at a rate of $1.79 million per year for five years? What effect would it have on next year's earnings?Suppose a firm's tax rate is 25%. a. What effect would a $9.05 million operating expense have on this year's earnings? What effect would it have on next year's earnings? b. What effect would a $10.2 million capital expense have on this year's earnings if the capital expenditure is depreciated at a rate of $2.04 million per year for five years? What effect would it have on next year's earnings? a. What effect would a $9.05 million operating expense have on this year's earnings? What effect would it have on next year's earnings? (Select all the choices that apply.) A. A $9.05 million operating expense would be immediately expensed, increasing operating expenses by $9.05 million. This would lead to a reduction in taxes of 25% x $9.05 million = $2.26 million. B. A $9.05 million operating expense would be immediately expensed, increasing operating expenses by $9.05 million. This would lead to an increase in taxes of 25% × $9.05 million = $2.26 million. C. Earnings would decline by $9.05…Suppose a firm's tax rate is 25 %. What effect would a $ 11.4 million capital expense have on this year's earnings if the capital expenditure is depreciated at a rate of $ 2.28 million per year for five years? What effect would it have on next year's earnings?
- A company has interest expenses totaling = $722 MM, for which they pay 7%/annum to their lender. Last year, the company paid $827 MM in tax, based on earnings before taxes of $4, 135M; what amount of additional taxes would the co. pay if they were all equity - financed (i.e., no debt) and what is the PV of tax shield (assume all metrics stay constant in perpetuity)?What's the rate of return you would earn if you paid $2,880 for a perpetuity that pays $65 per year? X-1 Corp's total assets at the end of last year were $425,000 and its EBIT was $52,500. What was its basic earning power (BEP) ratio?Petra, Inc. paid $34,000 in interest expense on its long-term debt. If Petra's marginal tax rate is 35%, what was the "after-tax cost" of this interest expense? (Round your answer to the nearest dollar)
- A firm has total interest charges of $10,000 per year, sates of $1 million, a tax rate of 40 percent, and a net profit margin of 6 percent. What is the firm's times-interest-earned ratio?Suppose a firm's tax rate is 25%. 1. What effect would a $10.92 million operating expense have on this year's earnings? What effect would it have on next year's earnings? (Select all the choices that apply.) A. $10.92 million operating expense would be immediately expensed, increasing operating expenses by $10.92 million. This would lead to a reduction in taxes of 25%×$10.92 million=$2.73 million. B. A $10.92 million operating expense would be immediately expensed, increasing operating expenses by $10.92 million. This would lead to an increase in taxes of 25%×$10.92 million=$2.73 million C. Earnings would decline by $10.92 million−$2.73 million=$8.19 million. There would be no effect on next year's earnings. D. Earnings would decline by $10.92 million−$2.73 million=$8.19 million. The same effect would be seen on next year's earnings 2. What effect would a $10.25 million capital expense have on this year's earnings if the capital expenditure is depreciated at a rate of $2.05…Assume Lasher’s Kitchen has pretax earnings of $150,000 after depreciation expense of $30,000. If the firm’s tax rate is 25 percent, what is its cash flow from operations? Round your answer to the nearest dollar. $