1. Eagle Products’ EBIT is $500, its tax rate is 35%, depreciation is $25, capital expenditures are $65, and the planned increase in net working capital is $30. What is the free cash flow to the firm?
2. Jim has an annual income of $185,000. Jim is looking to buy a house with monthly property taxes of $140 and monthly homeowner’s insurance of $70. Apple bank has a maximum front end DTI limit of 28%, what is the most they will allow Jim to spend on a monthly mortgage?
3. A firm has a weighted average cost of capital of 9.6 percent and a cost of equity of 14.5 percent. The debt-equity ratio is .70. There are no taxes. What is the firm's cost of debt?