1. Karsted Air Services is now in the final year of a project. The equipment originally cost $21 million, of which 85% has been depreciated. Karsted can sell the used equipment today for $5.25 million, and its tax rate is 35%. What is the equipment's after-tax salvage value? Round your answer to the nearest dollar. Write out your answer completely. For example, 13 million should be entered as 13,000,000. $
2. Company JC Electronics had a net income of $1,000,000 this year. Next year's total capital budget is $2,600,000. If the target capital structure is 50% debt and the rest equity, what will be this year's dividend payout ratio?
3. Because American Depository receipts (ADRs) are denominated in dollars and are traded in the U.S., do they have less exchange rate risk to U.S. investors than the underlying foreign shares of stock? Explain.
4. Company JC Electronics had a net income of $1,000,000 this year. Next year's total capital budget is $2,600,000. If the target capital structure is 50% debt and the rest equity, what will be this year's dividend payout ratio?