What is mitchells target fixed assets and sales ratio

Assignment Help Financial Management
Reference no: EM131177961

Quantitative Problem 1: Beasley Industries' sales are expected to increase from $5 million in 2013 to $6 million in 2014, or by 20%. Its assets totaled $3 million at the end of 2013. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2013, current liabilities are $780,000, consisting of $150,000 of accounts payable, $400,000 of notes payable, and $230,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 50%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations.

Quantitative Problem 2: Mitchell Manufacturing Company has $2,000,000,000 in sales and $310,000,000 in fixed assets. Currently, the company's fixed assets are operating at 75% of capacity.

A. What level of sales could Mitchell have obtained if it had been operating at full capacity? Round your answer to the nearest dollar. Do not round intermediate calculations.

$------   

B. What is Mitchell's Target fixed assets/Sales ratio? Round your answer to two decimal places. Do not round intermediate calculations.

--------- %

C.If Mitchell's sales increase by 40%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Round your answer to the nearest dollar. Do not round intermediate calculations.

$ --------

$ -----------

Reference no: EM131177961

Questions Cloud

Difference in face value-current market price of securities : Currently, yields to maturity on 1 year and 2 year us treasury securites are .602% and .852%. You can assume that for simplification purposes there are no coupon payments on these bonds and the yield to maturity is entirely due to the difference in f..
Combines the risk-free asset and the market portfolio : A portfolio that combines the risk-free asset and the market portfolio has an expected return of 7.2 percent and a standard deviation of 10.2 percent. The risk-free rate is 4.2 percent, and the expected return on the market portfolio is 12.2 percent...
Cash flow problems : Roofling Company paid wages of $319,600 this year. Of this amount, $193,900 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 4.3% for Roofling Company. Due to cash flow problems, the company did not make any SUTA payme..
What must the expected return on the market : A stock has an expected return of 10 percent, its beta is 1.10, and the risk-free rate is 4 percent. What must the expected return on the market be?
What is mitchells target fixed assets and sales ratio : Beasley Industries' sales are expected to increase from $5 million in 2013 to $6 million in 2014, or by 20%. Its assets totaled $3 million at the end of 2013. Beasley is at full capacity, so its assets must grow in proportion to projected sales. What..
Description of a balance sheet : Please provide a brief description of a balance sheet. What information can one get from the balance sheet?   Please find a recent balance sheet from a public company and comment on how the company finances its assets.
What’s wrong with cellphones : "DYO Final" is for a class I took called Literature for Children. It was a Design-Your-Own (DYO) paper on any topic you wanted pertaining to children's literature. In my paper, I explored the effect of sad literature on children. What’s wrong with ce..
Understand buyer behavior and the purchase decision making : Understand buyer behaviour and the purchase decision making process. describe the main stages of the purchase decision making process. explain theories of buyer behaviour in terms of individuals and markets. 3 explain the factors that affect buyer be..
Describe the main stages of the purchase decision making : Buyer behaviour and the purchase decision making process: Describe the main stages of the purchase decision making process as they relate to your organisation's customers. Explain theories of buyer behaviour in terms of individual customers and marke..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Trading at premium or discount relative to the spot rate

Assume that interest rate parity holds and that 90-day risk-free securities yield 5% in the United States and 5.3% in Germany. In the spot market, 1 euro equals $1.40. What is the 90-day forward rate? Is the 90-day forward rate trading at a premium o..

  What is the lock in three month interest rate

A bank wants to lock in the 3-month interest rate starting on June 20, 2017. Currently, 6/2017 Eurodollar futures price is 94.51 and 9/2017 Eurodollar futures price is 97.55. What is the lock in 3-month interest rate between 6/2017 and 9/2017? (margi..

  Tenant is fundamental to value of lease-therefore property

You are interested in buying a property that has Starbucks as the major lessee. The Starbucks lease has a current term of 15 years. The current lease is a net lease. This means that the landlord pays all taxes associated with the property and Starbuc..

  What is the ri and the required rate of return on stock

Suppose rRF = 9%, rM = 14%, and bi =1.3. what is the ri, the required rate of return on stock i? Now suppose that rRF (1) increases to 10% and (2) decreases to 8%. The slope of SML remains constant. How would this affect rM and rI?

  Each six months into building and loan association

A man deposits $300 at the end of each six months into building and loan association that pays 10% compounded semi-anually. How much will he have to his credit at the end of 10 years?

  What is the bonds price-one-year zero rates

The six-month and one-year zero rates are both 10% per annum. For a bond that has a life of 18 months and pays a coupon of 8% per annum (with semiannual payments and one having just been made), the yield is 10.4% per annum. What is the bond’s price?

  Weighted average of that implied by outstanding debt issues

Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $77, and the book value per share is $8. Filer Manufacturing also has two bond issues outstanding. The most recent dividend was $4.9 and the dividend gro..

  How to prepare the financial statements for breathescreen

demonstrate how to prepare the financial statements for BreatheScreen Inc. for the full year ended December 2013.

  Project evaluation

Your firm is contemplating the purchase of a new $625,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $69,000 at the end of that time. what is the IRR for this proj..

  Treasury strip-use annual compounding of interest

A US Treasury STRIP with a face value of $1000 has 12 years to maturity. In excel, compute and graph the yields for prices of $400 to $1000, in $50 increments. Use annual compounding of interest.

  What is minimum price hank would need to receive

Hank purchased a $26,500 car two years ago using a 8 percent, 4-year loan. He has decided that he would sell the car now, if he could get a price that would pay off the balance of his loan. What’s the minimum price Hank would need to receive for his ..

  Ow much interest will he pay over the life of the loan

Larry Davis borrows $80,000 at 14 percent interest toward the purchase of a home. His mortgage is for 25 years. How much will his annual payments be? How much interest will he pay over the life of the loan?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd