Finance Question - Finance Math Problems

1Units of Sales in Year 1: 100,000

2Price per Unit: $10

0. Variable cost per unit: 30%

0. Fixed Costs: $120,000

0. Income taxes: 15%

0. Interest Expense: $200,000

0. In year 2, Price per unit increases to $11.50, and unit of sales increases by 3%, all other assumptions remain the same.

6.Calculate the sustainable growth based on the following information: • Earnings after taxes = $35,000 • Equity = $100,000 • d=22.4%

7. Calculate a table of interest rates for 5 years based on the following information:

0. The pure interest rate is 2%

0. Inflation expectations for year 1 = 3%, year 2 =4%, years 3-5 =5%

0. The default risk is .1% for year one and increases by .1% over each year

0. Liquidity premium is 0 for year 1 and increases by .2% each year

0. Maturity risk premium is 0 for years 1 and 2 and .3% for years 3-5