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Assume that you are Cochran?s assistant and that you help her answer the following questions for

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Assume that you are Cochran?s assistant and that you help her answer the following questions for Meissner.;1.) What effect did the expansion have on sales and net income? What effect did the expansion have on the asset side of the balance sheet? What effect did it have on liabilities and equity?;2.) What do you conclude from the statement of cash flows?;3.) Calculate Computron?s return on invested capital. Computron has a 10% cost of capital (WACC).;4.) Cochran also has asked you to estimate Computron?s EVA. She estimates that the after-tax cost of capital was 10% in both years.;5.) What happened to Computron?s Market value added (MVA)?;6.) Assume that a corporation has $100,000.00 of taxable income from operations plus $5,000.00 of interest income and $10,000.00 of dividend income. What is the company?s federal tax liability?;7.) Assume that you are in the 25% marginal tax bracket and that you have $5,000.00 to invest. You have narrowed your investment choice down to California bonds with a yeiled of 7% or equally risky ExxonMobil bonds with a yield of 10%. Which one should you choose and why? At what marginal tax rate would you be indifferent to the choice between California and ExxonMobil bonds?

 

Paper#29850 | Written in 18-Jul-2015

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