Table 1 A B $ $ Assets 74,000 140,000 PPE 54,000 110,000 Cash + AR...
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Accounting
Table 1
A B $ $ Assets 74,000 140,000 PPE 54,000 110,000 Cash + AR + Inventory 20,000 30,000 Liabilities 48720 87200 Equity ? ? Research & Development
14,600 27,000 Training Expenses 8900 10200 Sales 85400 87000
Cogs & Operating expenses 45875 47650 Depreciation 20000 20000 EBIT 19,525 19350 Tax 30% 25% Net income 12,167 12158 A B Cost of equity 9% 8% Cost of debt 5.5% 4.5% A =L + E Assume Liabilities consist of 20% current liabilities and the rest is debt on which the company has to pay interest The table above shows the financial data of three companies A,B and C. The initial investment was $65000.
Required1. Carry out a Dupont Analysis to show what has contributed to the ROE of the company [profitability; efficiency; financial leverage] for company B 2. Calculate the WACC of the company B 3. Calculate the EVA of company B 4. Calculate the residual income of company B
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