Trudy's Pizza Is an Unlevered Firm with an After-Tax Net

question 270

Multiple Choice

Trudy's Pizza is an unlevered firm with an after-tax net income of $47,000. The unlevered cost of capital is 7.5% and the tax rate is 35%. What is the value of this firm?

• A) $219,333
• B) $328,333
• C) $407,334
• D) $626,667
• E) $733,333

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Definitions:

C Horizon

The layer of soil that consists of weathered rock and little organic material, often serving as the foundation of the soil profile.

A Horizon

The top layer of soil, known as topsoil, where organic matter decays and nutrients are readily available for plants.

Casparian Strip

The Casparian strip is a barrier made of a band of cell wall material found in the roots of plants, blocking the passive flow of water and solutes into the xylem by way of cell walls.

Endodermal Cells

Cells forming the innermost layer of the three primary cell layers in early embryonic development, which develop into the lining of the gut and associated structures.