Q1 (1.5 marks)
Ahlam Companyâs net income for the year 2000, is $3,700,214. The company had an EBITDA of $ 10,125,300, and its depreciation and amortization expense was equal to $2,543,790. The company’s average tax rate is 35 percent.
What is the amount of interest expenses for the firm? (Show the details of your calculations).
Prepare a common sized Income Statement if net sales equal $12,000,000.
Q2. (1 Mark)
The following are accounts balance (in thousands) for Malak Company. Calculate Net Income after-tax (show intermediate steps) t=35% for the year ended December 31, 2020.
Net property and equipment
$ 2,000
Accounts receivable
$3,000
Notes payable
$37,000
Revenues
$ 983,000
Supply expenses
$ 255,000
Depreciation expenses
$ 35,000
Labor expense
$300,000
Interest Expenses
$11,000
Stockholdersâ Equity
$61,500
Cash & cash equivalents
$97,000
Long-term debt
$3,500
Q3. Calculate the following ratios from the Balance Sheet and the Income Statement given below: (1.5 Mark)
Current Ratio
Debt Ratio
Fixed asset turnover
Total asset turnover
Operating profit margin
Balance Sheet:
Cash
30,000
Acct/Rec
72,500
Inventories
50,000
Current assets
152,500
Net fixed assets
240,000
Total assets
392,500
Accts/Pay
44,500
Accrued expenses
31,000
Short-term N/P
9,500
Current liabilities
85,000
Long-term debt
110,000
Owner’s equity
197,500
Total liabilities and owners equity
392,500
Income Statement:
Net sales
450,000
COGS
220,000
Gross profit
230,000
Operating expenses
128,000
Net operating income
102,000
Interest expense
18,500
EBT
83,500
Income taxes
33,000
Net income
50,500
Q4. Using the values below, answer the questions that follow: (1mark)
Amount of annuity: $500
Interest rate: 9%
N=10 years
Calculate the future value of the annuity, assuming that it is
An ordinary annuity.
An annuity due.
Compare your findings in parts a(1) and a(2). All else being identical, which type of annuityâordinary or annuity dueâis preferable as an investment? Explain why.
Sample Solution
war (Frowe (2011), Page 50). Firstly, Vittola discusses one of the just causes of war, most importantly, is when harm is inflicted but he does mention the harm does not lead to war, it depends on the extent or proportionality, another condition to jus ad bellum (Begby et al (2006b), Page 314). Frowe, however, argues the idea of âjust causeâ based on âSovereigntyâ which refers to the protection of political and territorial rights, along with human rights. In contemporary view, this view is more complicated to answer, given the rise of globalisation. Similarly, it is difficult to measure proportionality, particularly in war, because not only that there is an epistemic problem in calculating, but again todayâs world has developed (Frowe (2011), Page 54-6). Furthermore, Vittola argues war is necessary, not only for defensive purposes, âsince it is lawful to resist force with force,â but also to fight against the unjust, an offensive war, nations which are not punished for acting unjustly towards its own people or have unjustly taken land from the home nation (Begby et al (2006b), Page 310&313); to âteach its enemies a lesson,â but mainly to achieve the aim of war. This validates Aristotleâs argument: âthere must be war for the sake of peace (Aristotle (1996), Page 187). However, Frowe argues âself-defenceâ has a plurality of descriptions, seen in Chapter 1, showing that self-defence cannot always justify oneâs actions. Even more problematic, is the case of self-defence in war, where two conflicting views are established: The Collectivists, a whole new theory and the Individualists, the continuation of the domestic theory of self-defence (Frowe (2011), Page 9& 29-34). More importantly, Frowe refutes Vittolaâs view on vengeance because firstly it empowers the punisherâs authority, but also todayâs world prevents this action between countries through legal bodies like the UN, si>
war (Frowe (2011), Page 50). Firstly, Vittola discusses one of the just causes of war, most importantly, is when harm is inflicted but he does mention the harm does not lead to war, it depends on the extent or proportionality, another condition to jus ad bellum (Begby et al (2006b), Page 314). Frowe, however, argues the idea of âjust causeâ based on âSovereigntyâ which refers to the protection of political and territorial rights, along with human rights. In contemporary view, this view is more complicated to answer, given the rise of globalisation. Similarly, it is difficult to measure proportionality, particularly in war, because not only that there is an epistemic problem in calculating, but again todayâs world has developed (Frowe (2011), Page 54-6). Furthermore, Vittola argues war is necessary, not only for defensive purposes, âsince it is lawful to resist force with force,â but also to fight against the unjust, an offensive war, nations which are not punished for acting unjustly towards its own people or have unjustly taken land from the home nation (Begby et al (2006b), Page 310&313); to âteach its enemies a lesson,â but mainly to achieve the aim of war. This validates Aristotleâs argument: âthere must be war for the sake of peace (Aristotle (1996), Page 187). However, Frowe argues âself-defenceâ has a plurality of descriptions, seen in Chapter 1, showing that self-defence cannot always justify oneâs actions. Even more problematic, is the case of self-defence in war, where two conflicting views are established: The Collectivists, a whole new theory and the Individualists, the continuation of the domestic theory of self-defence (Frowe (2011), Page 9& 29-34). More importantly, Frowe refutes Vittolaâs view on vengeance because firstly it empowers the punisherâs authority, but also todayâs world prevents this action between countries through legal bodies like the UN, si>
