1.Pop Evil, Inc.'s, net income for the most recent year was $10,146. The tax rate was 24 percent. The firm paid $3,430

Question

1.Pop Evil, Inc.'s, net income for the most recent year was $10,146. The tax rate was 24 percent. The firm paid $3,430 in total interest expense and deducted $2,195 in depreciation expense. What was the cash coverage ratio for the year? 2.You decided to save money for a travel to Barcelona in two years. You decided to open a savings account and make equal monthly deposits for the next two years. You think that you need to save $5,000. You checked a few banks to find out the best savings account and identified one, the APR of which is 3.6%. You will receive interests every month and you are going to keep those received interests in your savings account. How much do you have to deposit each month into this account to have exactly $5,000 in two years? (i.e., you are going to make 24 monthly deposits starting from the end of this month. You have to have $5,000 in your account right after you make your twenty-fourth deposit) 3.If the appropriate interest rate is 10%, then present value of

Help In Homework · Accepted Answer

1.Cash Coverage Ratio = (EBIT + Non Cash Expenses)/Interest Expense = EBIT = earnings before interest and tax EBT*(1- tax rate) = Net Income , EBT is Earnings before Tax Therefore EBT = Net Income / .76 =13350 EBIT = 13350 + 3430 = 16780 , EBT + Interest Cash Coverage Ratio = (16780 + 2195)/3430 =5.53 2.Please use this google drive link to download the answer file. https://drive.google.com/file/d/1wXeF43L9BArtwKWy1iiRmWSd_zmLdr6I/view?usp=sharing Note: If you have any trouble in viewing/downloading the answer from the given link, please use this below guide to understand the whole process. https://helpinhomework.org/blog/how-to-obtain-answer-through-google-drive-link 3. Here, Rate of interest= 10% Amount to be paid every year= $725 Time period= 20 years Since it is paid in the start of the year it shall be for for 19 years present value plus one year at the original cost. Present Value= 9 + 725 = $ 6,789.57 So, the present value shall be closest to $ 6,790. please see the attached file. 4. a. EVA = EBIT(1 - Tax%) - (Cost of capital × Total Capitalization) Total capitalization = Long term debt + Shareholder's equity Tax rate = 11.97/57 = 21% Total capitalization =$(141 + 240) =$ 381 millions EVA = [(89 × (1 - 21%)) - ( 8.5% ×381)] millions =$( 70.31 - 32.385) millions =$ 37.925 millions =$ 37.93 millions b. Return on capital = (EBIT×( 1 - tax%)/(Total Capitalization) = (89 ×(1 - 21%))/381 = 70.31/ 381 = 0.18454068241 = 0.1845 =18.45% c. Return on equity = Net

INCOME STATEMENT
(Figures in $ millions)
Net sales	$	901.00
Cost of goods sold		761.00
Depreciation		51.00
Earnings before interest and taxes (EBIT)	$	89.00
Interest expense		32.00
Income before tax	$	57.00
Taxes		11.97
Net income	$	45.03

BALANCE SHEET
(Figures in $ millions)
	End of Year		Start of Year
Assets
Current assets	$	389	$	352
Long-term assets		298		242
Total assets	$	687	$	594
Liabilities and shareholders’ equity
Current liabilities	$	214	$	177
Long-term debt		128		141
Shareholders’ equity		345		240
Total liabilities and shareholders’ equity	$	687	$	558

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