What is the company projected funds needed

Assignment Help Financial Management
Reference no: EM13947033

Crum Co’s balance sheet and income statement for 2001 are given below. The firm expects sales to grow by 50% in 2002. Operating costs, spontaneous liabilities and assets will increase in proportion to sales. The company plans to finance any additional funds needed using debt at an interest rate of 10%. What is the company’s projected funds needed for 2002? Assume interest expenses are 10% of the beginning year of debt balance. 2001 2002 – 1st pass 2002 – 2nd pass Sales $1,000 Operating costs 800 EBIT 200 Interest 16 EBT 184 Taxes (40%) 73.6 Net Income 110.40 Dividends (60%) 66.24 Addn. To RE 44.16 Cash 30 A/R 150 Inventories 200 Total CA 380 Gross FA 700 Accum. Depreciation 80 Net FA 620 Total assets 1000 A/P and accruals 150 Debt 200 Common stock 150 Retained Earnings 500 Total Liab. & Equity 1000

Reference no: EM13947033

Questions Cloud

Contribution to individual retirement account : You have just made a $1,500 contribution to your individual retirement account. Assume you earn a rate of return of 8.7 percent and make no additional contributions. How much more will your account be worth when you retire in 25 years than it would b..
Capital asset pricing model approach to equity valuation : The capital asset pricing model approach to equity valuation:
Calculate the approximate market capitalization : Assume General Electric (GE) has about 10.3 billion shares outstanding and the stock price is $37.10. Also, assume the P/E ratio is about 18.3. Calculate the approximate market capitalization for GE
Compound interest on the unpaid balance : Mr. Bill S. Preston, Esq., purchased a new house for $170,000. He paid $10,000 down and agreed to pay the rest over the next 15 years in 15 equal end-of-year payments plus 11 percent compound interest on the unpaid balance. What will these equal paym..
What is the company projected funds needed : Crum Co’s balance sheet and income statement for 2001 are given below. The firm expects sales to grow by 50% in 2002. Operating costs, spontaneous liabilities and assets will increase in proportion to sales. What is the company’s projected funds need..
Calculate the yield to maturity of the bond : A four-year bond has an 8% coupon rate and a face value of $1,000. If the current price of the bond is $878.31, calculate the yield to maturity of the bond (assuming annual interest payments).
Cash inflow in cash budgeting comes mainly : Cash inflow in cash budgeting comes mainly from: A. Collection on accounts receivable B. Short-term debt C. Issuance of securities D. None of the above
Cash outflow in cash budgeting is mainly due : Cash outflow in cash budgeting is mainly due to: A. Capital expenditures B. Labor costs and other expenditures C. Payments on accounts payable D. Taxes, interest payments and dividend payments
What percentage of the portfolio is invested in stock : Stock A has an expected return of 12% and a standard deviation of 10.5%, and Stock B has an expected return of 20% and a standard deviation of 27.2%. The correlation coefficient between the two stock is -0.2. In order to produce the minimum risk port..

Reviews

Write a Review

Financial Management Questions & Answers

  Remainder is invested in T-Bills

You have $100,000 invested. Of that, $50,000 is invested in IVM stock which has a beta of 1.4, $30,000 is invested in UBM stock with a beta of 1.2, and the remainder is invested in T-Bills. Which of the following is true?

  What is the overall rate of return on the portfolio

One year ago, an American investor bought 2000 shares of London Bridges at a price of £24 (or 24 UK pounds) per share when the exchange rate was $1.4/1£ (or $1.40 dollars = 1 pound). The investor also invested 4,000,000 Japanese Yen in a money market..

  Depreciation is straight-line to zero over life of project

We are evaluating a project that costs $1,180,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 88,100 units per year. Suppose the projections g..

  Stock according to the security market line

What is your total return on the stock? What is the dividend yield? What is the capital gains yield and what is the expected return of the stock according to the security market line?

  Label the capital market line

Stock X has an expected return of 12% and a standard deviation of 8%. Stock Y has an expected return of 8% and a standard deviation of 5%. The correlation coefficient between the returns for X and Y is 0.2. Supposing these are the only 3 assets in th..

  Present value comparison

(Present value comparison) Much to your surprise, you were selected to appear on the TV show "The Price is Right". As a result of your prowess in identifying how many rolls of toilet paper a typical American family keeps on hand, you win the opportun..

  Uses only equity capital-two equally-sized divisions

Duval Inc. uses only equity capital, and it has two equally-sized divisions. Division A's cost of capital is 10.0%, Division B's cost is 14.0%, and the corporate (composite) WACC is 12.0%. All of Division A's projects are equally risky, as are all of..

  What determines whether to use the dividend growth model

If the cost of new common equity is higher than the cost of internal equity, why would a firm choose to issue new common stock? Explain the difference between WACC and MCC. What determines whether to use the dividend growth model approach or the CAPM..

  What was the true annualized return

You buy a stock for $20. After a year the price rises to $25 but falls back to $20 at the end of the second year. What was the average percentage return and what was the true annualized return?

  Determine the annual net pretax benefits to jackson

The Chicago bank has agreed to process Jackson's customer payments for an annual fee of $130,000. Determine the annual net pretax benefits to Jackson's of establishing a lockbox system with the Chicago bank.

  What is approximate real rate of return on investment

Last year, you purchased a stock at a price of $82.00 a share. Over the course of the year, you received $3.30 in dividends and inflation averaged 2.7 percent. Today, you sold your shares for $86.70 a share. What is your approximate real rate of retu..

  Series of cash flows

What is the total present value of the following series of cash flows, discounted at 10 percent?

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