3. Suppose you are given the following information for Bayside Bakery: sales $30

Question

3. Suppose you are given the following information for Bayside Bakery: sales $30,000; costs $15,000, addition to retained earnings-$4,221 ; dividends paid $469; interest expense $1,300; tax rate 30 percent What is the amount of the depreciation expense? a. $4,820 b. $5,500 c. $7,000 d. $8,180 e. $9,500 24. Phil is working on a financial plan for the next three years. This time period is referred to as which one of the following? a. financial range b. planning horizon c. planning agenda d. short-run e. current financing period 25. The internal growth rate of a firm is best described as the: a. minimum growth rate achievable assuming a 100 percent retention ratio. b. minimum growth rate achievable if the firm maintains a constant equity multiplier. c. maximum growth rate achievable excluding external financing of any kind. d. maximum growth rate achievable excluding any external equity financing while maintaining a constant debt-equity ratio e. maximum growth rate achievable with unlimited debt financing. 26. The sustainable growth rate of a firm is best described as the: a. minimum growth rate achievable assuming a 100 percent retention ratio. b. minimum growth rate achievable if the firm maintains a constant equity multiplier. c. maximum growth rate achievable excluding external financing of any kind. d. maximum growth rate achievable excluding any external equity financing while maintaining a constant debt-equity ratio. e. maximum growth rate achievable with unlimited debt financing.

Explanation / Answer

que 23)

lets say depreciation amount =x

so total sales = $30,000

cost =$15,000

hence EBITDA= 30000-15000= $15,000

EBIT= EBITDA-dep. = 15000-x

interest expense = $1300

hence Profit befor tax= 15000-x-1300 = 13700-x

taxrate =30%

hence Net income = (13700-x)*70%

div. paid = $469

hene addition to retianed earning = (13700-x)*70%-469

now addition to retained earning given = $4221

hence (13700-x)*0.7-469 = 4221

(13700-x)*0.7 = 4690

13700-x= 6700

x= 13700-6700 = $7,000

Hence option c is correct

Thanks

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.