Meyer & co. expects its ebit to be $111,000 every year forever. the firm can borrow at 6 percent. t
he company currently has no debt, and its cost of equity is 13 percent.

a. if the tax rate is 25 percent, what is the value of the firm? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

b. what will the value be if the company borrows $235,000 and uses the proceeds to repurchase shares? (do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Special order carson manufacturing, inc., sells a single product for $36 per unit. at an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. carson has been offered a price of $20 per unit on a special order of 2,000 units by big mart discount stores, which would use its own brand name on the item. if carson accepts the order, material cost will be $3 less per unit than for regular production. however, special stamping equipment costing $4,000 would be needed to process the order; the equipment would then be discarded. assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether carson should accept the special order. use a negative sign with answer to only indicate an income loss from special order; otherwise do not use negative signs with your answers.