Windsor Co. invested $1,060,000 in Sheridan Co. for 25% of its outstanding stock. Sheridan Co. pays out 30% of net income in dividends each year. Use the information in the following T-account for the investment in Sheridan to answer the following questions.
Investment in Sheridan Co.
1,060,000
121,000
36,300
a) How much was Parent Co.’s share of Sub Co.’s net income for the year?
Net income $Parent Co. invested $1,000,000 in Sub Co. for
(b) How much was Parent Co.’s share of Sub Co.’s dividends for the year?
Dividends $Parent Co. invested $1,000,000 in Sub Co. for
(c) What was Sub Co.’s total net income for the year?
Total net income $Parent Co. invested $1,000,000 in Sub Co. for
(d) What was Sub Co.’s total dividends for the year?
Total Dividends $Parent Co. invested $1,000,000 in Sub Co. for

Used cars usually have options: higher depreciation rate than new cars lower financing costs than new cars lower insurance premiums than new cars lower maintenance costs than new cars

Problem 9-5. net present value and taxes [lo 1, 2] penguin productions is evaluating a film project. the president of penguin estimates that the film will cost $20,000,000 to produce. in its first year, the film is expected to generate $16,500,000 in net revenue, after which the film will be released to video. video is expected to generate $10,000,000 in net revenue in its first year, $2,500,000 in its second year, and $1,000,000 in its third year. for tax purposes, amortization of the cost of the film will be $12,000,000 in year 1 and $8,000,000 in year 2. the company’s tax rate is 35 percent, and the company requires a 12 percent rate of return on its films. required what is the net present value of the film project? to simplify, assume that all outlays to produce the film occur at time 0. should the company produce the film?

Ursus, inc., is considering a project that would have a five-year life and would require a $1,650,000 investment in equipment. at the end of five years, the project would terminate and the equipment would have no salvage value. the project would provide net operating income each year as follows (ignore income taxes.):