What is the logic behind estimating FCF using Formula 1 (FCF = EBIT(1-TaxRate) + Depr – Capex – Chg NWC + Terminal CF)? Why are the mathematical signs of each variables the way they are? For instance, why is it “+ Depr” and “– Chg NWC”?

Q: Define each of the following terms:g. Market Value Added; Economic Value Added

A: We can define the terms as follows:

Q: Compare and contrast Measuring GDP using the Income Approach vs Measuring GDP using the Expenditure…

A: Gross Domestic Product is defined as the final value of the goods as well as services that used to…

Q: Which of the following is an appropriate computation for return on investment? a. Sales…

A: Return on Investment (ROI) is the measure to assess the efficiency of the capital invested. It is…

Q: porate earnings and profits (E&P) is correct?

A: E&P refers to the accumulated earnings and profits of a company. The E&P of a company…

Q: why it's decrease and increase in percentage

A: A comparative balance sheet shows the financial position of the same company at two or more…

Q: Return on Assets, or ROA, can be expressed as the product of two ratios.  Which two?

A: Return on Assets: It refers to the ratio that measures the profitability of the company with respect…

Q: . How are the component costs combined to forma weighted average cost of capital (WACC),and why is…

A: It is the discounted rate that has been calculated by the company on the basis of which present…

Q: What are common-size financial statements and how are they used? What item is the key figure (that…

A:

Q: The difference between gini coefficient of market income and gini coefficient of disposable income…

A: The difference between gini coefficient of market income and gini coefficient of disposable income…

Q: Calculate the following ratios: 1. Return on Capital Employed (ROCE) 2. Current Ratio 3. Gearing…

A: 1.Return on Capital Employed (ROCE) Return on capital employed is calculated by dividing net…

Q: a. On the basis of the available data please, estimate the cost of equity. b. On the basis of the…

A: Cost of Equity: It is the firm's cost of raising equity funds from the investors for expanding their…

Q: Why are market-based weights used instead of book-value-based weights when computing the weighted…

A: Market value is that present worth of the firm or any resource in the market on which it tends to be…

Q: Classify method of comparing economic worth as a ranking method or as an incremental method. a. CW…

A: There are various methods that are used to compare investment alternatives on the basis of maximum…

Q: What would be the weight used for equity in the computation of OMG's WACC? (Round your answer to 2…

A: WACC: It is the average cost of capital for the firm to raise capital from different sources like…

Q: The numerator of the return on total assets is a. net income b. net income plus tax expense c.…

A: Return on Total Assets = Net Income + Interest Expenses (1-Tax Rate) / Average Total Assets

Q: Which one of the following formulas is correct? O i) Profit margin = EBIT / Sales O ii) ROA = ROE /…

A: ROA = ROE / Equity Multiplier ROA = Net Income / Total Assets ROE = Net Income / Shareholders'…

Q: s of financial ratios? Next t e:

A: Main type of Financial Ratio are (1) Liquidity Ratio (2) Solvency Ratio (3) Activity Ratio (4)…

Q: How do I Compute Tates (1) weighted average cost of capital and (2) hurdle rate? Round answers to…

A: Answer -  Working Note -    Particular Weighted Average Cost of Capital Debt ( 10% * 60%) 6%…

Q: a. What is STP's unlevered cost of capital? b. What is STP's after-tax debt cost of capital? c. What…

A: a) Total common stock value = 32 * 12 = 384 Total debt = 100 Total value = 384 + 100 = 484 Unlevered…

Q: Which one of the following is an internal characteristic that can affect the value of an investmen…

A: Internal Characteristics mean factors within the organization. It excludes political events,…

Q: Is there a reason to pick one over the other? Which formula would apply to a certain company or…

A: The FCFF formulae: All the four formulae provided above are used to find the FCFF. However the…

Q: financial ratios?

A: Ratio is tools to analyse the financial data of an organisation. Some Financial ratio are as  Gross…

Q: The effects of financial choices can be understood by performing which of these? Check two. O Micro…

A: Decision making is the most important function of management. But when it comes to financial…

Q: How do you calculate the breakeven point in revenues?

A: Break-even point is the level at which profit is zero; that is, at the Break-even level, expenses…

Q: Webster Company has compiled the information shown in the following​ table attached: . a.…

A: Capital Book value Market value After tax cost Debt 4000000 3880000 7% Preferred stock 40000…

Q: 17. Based on the above, which method would show a larger net income number? (FIFO, LIFO or WA)

A: 1. FIFO Method - Under FIFO Method, Inventory purchased first is sold first. 2. LIFO Method - Under…

Q: Which of these are not the method of financial statement analysis Select one: O a. Trend Analysis b.…

A:

Q: The relationship between two financial variables can be expressed in: *         a) Pure ratio…

A: Ratio analysis help to analyse the financial statements of the company. The management can take…

Q: When is WACC (weighted average cost of capital)  commonly used

A: The weighted average cost of capital represents the rate that has been expected to pay to the…

Q: When should an average amount be used for the numerator or denominator? When the denominator is a…

A: The average amount is used for maintaining the nearest accuracy of the financial ratio. It helps the…

Q: One should determine the after-tax weighted average cost of capital by   Multiple Choice A)…

A: After-tax weighted average cost of capital = Weighted average after tax cost of debt + Weighted…

Q: Define each of the following terms:a. Weighted average cost of capital, WACC

A: Introduction: This question is related to the concepts of corporate finance. Corporate money…

Q: Forward P/E = Market capitalization/ forecasted income

A: There are two types of P/E ratios 1) Trailing P/E ratio 2) Forward P/E ratio   Trailing P/E ratio…

Q: When performing a horizontal analysis on an income statement, the percentage change inany individual…

A: Income statement: It is one of the financial statements prepared by an organization. This statement…

Q: Which of the following formulas is correct when describing the relationship between income (1),…

A: Present Value = (Future cash Flows/Rate)   Hence, Value is computed as discounting the cash flows…

Q: Vertical analysis: a. Is also known as common-size analysis b. Is a technique for evaluating…

A: Vertical analysis is also called as common-size analysis which is used to analyse financial…

Q: BRIEFLY ASSESS HOW TAXATION CAN BE USED TO CONTROL: a. BALANCE OF PAYMENT, b. SAVING, c.…

A: Taxation is the government's tool for shaping the economy into the desired shape. Governments…

Q: For each company calculate and explain: i.The covariance ii.The correlation

A: Each situation will have a probability of  1/4 or 0.25  or Simply we can get expected return by…

Q: Solve this balance sheet picture by horizontal analysis and write why it's decrease and increase in…

A: Horizontal Analysis In a simple word horizontal analysis which states that comparison of the two…

Q: What are the siginificance of financial ratios (i.e. current ratio; DSO; TATO; profit margin; ROA;…

A: Financial ratios are relationships obtained from the financial ratios of a company.There are several…

Q: s the statement which indicates the relationship of different items of financial statement with some…

A: Financial statement analysis refers to the analysis of a company's financial position with an…

Q: Explain the meaning of the following terms: (a) common-size analysis, (b) vertical analysis, (c)…

A: Evaluation of financial information by expressing each item in the financial statement as a…