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Phoenix [80]
2 years ago
11

Rosie and her brother michael decided recently to purchase an rv together. they both want to use the rv to take their families c

amping. the price for the rv was $10,000. since michael expects to use the rv 60% of the time and rosie 40% of the time, michael contributed $6,000 and rosie contributed $4,000. their ownership percentage equals their contribution percentage. which type of property titling must the rv be to reflect their ownership interest?
Business
1 answer:
Mazyrski [523]2 years ago
6 0
Tenancy in common is the answer
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Pendergast, Inc., has no debt outstanding, and has a total market value of $180,000. Earnings before interest and taxes (EBIT) a
satela [25.4K]

Answer:

See the explanation below:

Explanation:

a- Calculate ROE and EPS under each of the economic scenarios before any debt is issued.

Under an expansion

Earnings before interest and taxes (EBIT) = $23,000 * (100% + 20%) = $27,600

Earnings after taxes = $27,600 * (100% - 35%) = $17,940

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $17,940 / $180,000 =

0.0997, or 9.97%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $17,940 /

6,000 = $2.99 per share

Under a recession

Earnings before interest and taxes (EBIT) = $23,000 * (100% - 30%) = $16,100

Earnings after taxes = $16,100 * (100% - 35%) = $10,465

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $10,465 / $180,000 =

0.0581, or 5.81%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $10,465 /

6,000 = $1.74 per share

b- Repeat part a, assuming that the company goes through with the capitalization.

Under an expansion

Earnings before interest and taxes (EBIT) = $23,000 * (100% + 20%) = $27,600

Interest on debt = $75,000 * 7% = $5,250

Page 2 of 2

Earnings after interest = $27,600 - $5,250 = $22,350

Earnings after taxes = $22,350 * (100% - 35%) = $14,527.50

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $14,527.50/ $180,000 =

0.0807, or 8.07%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $14,527.50 /

6,000 = $2.42 per share

Under a recession

Earnings before interest and taxes (EBIT) = $23,000 * (100% - 30%) = $16,100

Interest on debt = $75,000 * 7% = $5,250

Earnings after interest = $16,100 - $5,250 = $10,850

Earnings after taxes = $10,850 * (100% - 35%) = $7,052.50

Return on equity (ROE) = Earnings after taxes / Total market value of equity = $7,052.50 / $180,000 =

0.0392, or 3.92%

Earnings per share (EPS) = Earnings after taxes / Number of shares of stock outstanding = $7,052.50 /

6,000 = $1.18 per share

c- Calculate the percentage changes in EPS when the economy expands or enters a recession.

Percentage change under expansion = ($2.42 - $2.99)/$2.99 = 0.1902 decrease, or 19.02% decrease.

Percentage change under recession = ($1.18 - $1.74)/ $1.74 = 0.3218 decrease, or 32.18% decrease

5 0
2 years ago
Helpful team members strive to resolve differences and encourage a warm, supportive climate by praising and agreeing with others
Salsk061 [2.6K]

Answer:

The statement is: True.

Explanation:

<em>Helpful team members</em> are those who take advantage of their expertise to help the team achieve its goals faster or at least at the expected time. More than troublemakers they are problem solvers. Helpful team members act proactively, tend do be charismatic and enthusiastic, and motivate others to continue working towards a common goal.

7 0
2 years ago
​bill's organization expects​ 50% of profits to be generated by products that did not exist five years ago. what is the nature o
Elena-2011 [213]
The nature of the program that the organization's managers are likely to follow is INNOVATIVE. The organization's manager wanted to improve the products and set a goal to reach so that the employee will do their best to reach the goal that they didn't exist five years ago.
6 0
2 years ago
Sofia has saved $10,000. She wants to be sure that she is earning interest on her money and can add to her savings. She also wan
guapka [62]

A money market account is the type of account is most suitable for Sofia’s needs.

A money market account earns interest on the money that is deposited at a higher rate than a normal savings account. Even though this is not a common savings account, the account holder is able to write checks from the account if the money needs to be accessed. A money market account is a 'best of both worlds' account because the holder can benefit like a savings and checking account would allow (with some restrictions).

3 0
2 years ago
Read 2 more answers
Tropical Fruit Extracts expects its earnings before interest and taxes to be $218,000 a year forever. Currently, the firm has no
katen-ka-za [31]

Answer:

The unlevered value of the firm is $869325.15

Explanation:

For computing the value of unlevered firm, the following formula should be used which is shown below:

Value of levered firm = Earning before interest and taxes × (1 - tax rate) ÷ cost of equity

where,

Earnings before income and taxes are $218,000

Cost of equity is 16.3%

And, the tax rate is 35%

Now put these values on the above formula

So, the value would be equals to

= $218,000 × (1 - 0.35) ÷ 16.3%

= $141,700 ÷ 16.3%

= $869325.15

The other terms like bonds and the annual coupon should not be considered in the computation part because we have to calculate for unlevered firm which only includes equity and the bond is a debt security. Thus, it is irrelevant.

Hence,  the unlevered value of the firm is $869325.15

3 0
2 years ago
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