Tool Manufacturing has an expected EBIT of $82,000 in perpetuity and a tax rate of 24 percent. The company has $143,500 in outstanding debt at an interest rate of 6.3 percent and its unlevered cost of capital is 13 percentWhat is the value of the firm according to M&M Proposition I with taxes?

The value of the firm according to M&M Proposition I with taxes is $513,824.62

Explanation:

Value of firm = [EBIT x (1-Tax) / Equity Cost] + [Debt x Tax rate]

Value of firm = 82000 x (1-24%) / 13% + 143500 x 24%

Value of firm = 62320 / 0.13 + 143500 x 0.24

Value of firm = 479,384.62 + 34,440‬

Value of firm = $513,824.62‬

b, fewer problems later! good luck

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23