Origami Company Is Considering a New Project and Needs to Raise

question 109

Multiple Choice

Origami Company is considering a new project and needs to raise $800,000 of capital. Their after-tax net income would be $75,000 if they do not implement the new project. If the new project is implemented, it will add an additional $50,000 of profits before tax and interest. Origami's income tax rate is 40%. If they use debt financing, the interest will be at 5%.
- Origami has 25,000 shares of common stock outstanding and no preferred stock.
If Origami decides to implement the project using debt financing, what will be the earnings per share amount? (Please round to the nearest cent.)

• A) $3.24
• B) $4.14
• C) $3.40
• D) $4.20

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Definitions:

Visual Stimuli

Any object or element within the environment that can be seen and is used in psychological experiments to elicit a response from the participant.

Minimal Risk

A research criterion indicating that the likelihood and magnitude of harm or discomfort anticipated in the research are not greater than those encountered in daily life or during routine physical or psychological examinations.

Blood Pressure

The pressure of circulating blood on the walls of blood vessels, typically measured to assess heart health.

Minimal Risk Research

Research in which participants are exposed to risks that are no greater than those encountered in daily life or in routine physical or psychological tests.