Master Business with Fun Quizzes & Brain Teasers!
victor rumsfeld inc.'s dividend policy is under review by its board. its projected capital budget is $2,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $650,000. if the company follows a residual dividend policy, what total dividends, if any, will it pay out? select the correct answer. a. $3,210 b. $4,280 c. $0 d. $2,140 e. $1,070
Table 12.16Firm BHigh PriceLow PriceFirm AHigh Price20, 2010, 30Low Price30, 1015, 15Reference: Ref 12-16(Table 12.16) In the table, the payoffs represent profits measured in thousands of dollars. In this infinitely repeated game, Firm A and Firm B are both using grim trigger strategies and agree to charge a high price in period 1. If Firm A has a change of heart and decides not to charge a high price in period 1, what is Firm A's expected payoff from cheating? Assume that d = 0.9.$580,000$2 million$315,000$165,000
Cameron Industries is purchasing a new chemical vapor depositor in order to make silicon chips. It will cost $5,000,000 to buy the machine and $10,000 to have it delivered and installed. Building a clean room in the plant for the machine will cost an additional $3 million. The machine is expected to raise gross profits by $4,500,000 per year, starting at the end of the first year, with associated costs of $1 million for each of those years. The machine is expected to have a working life of five years and will be depreciated over those five years. The marginal tax rate is 40%. What are the incremental free cash flows associated with the new machine in year 2? A. $1,002,000 B. $2,498,000 C. $2,500,800 D. $998,000