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Scott Equipment Organization is investigating various combinations of short- and long-term debt in financing assets. Assume the organization has decided to employ $10 million in current assets and $15 million in fixed assets in its operations next year, and EBIT for next year is $8 million. The organization's income tax rate is 40%. Stockholders' equity will be used to finance $15 million of assets, with the remainder financed by short- and long-term debt. The organization is considering implementing one of the policies below. Current Assets: $10 million Fixed Assets: $15 million Total Assets : $25 million Stockholders' Equity: $15 million Total Amount of Assets to be financed by debt: $10 million Tax Rate: 40% Total EBIT: $8 million Aggressive Strategy Short Term Debt: $8 million, 6% interest rate Long Term Debt: $2 million, 8% interest rate Moderate Strategy Short Term Debt: $5 million, 5.5% interest rate Long Term Debt: $5 million,7.5% interest rate Conservative Strategy Short Term Debt: $3 million, 5.25% interest rate Long Term Debt: $7 million, 7.25% interest rate Determine the following for each policy: • Net Income • Expected rate of return on stockholders' equity (Net Income/Equity) • Net working capital position (Current Assets - Current Liabilities) • Current ratio (Current Assets/Current Liabilities) • Would you rate them low, medium, or high with respect to profitability? • Would you rate them low, medium, or high with respect to risk? • What is your recommendation to management? Why?
By whom Dual factor theory was propose? Dual factor theory has been proposed by Herzberg.
The concept of the "democracy of goods" means what? 1. Fill in the blanks: By Mistake, someone left spaces unfilled in the status report below. a. Please complete the report
How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority management system?
Hatten (2009) stated, because inventory is such a significant expense, most businesses look carefully for ways to determine the appropriate levels of control for their inventory. H
Renesmee Corporation is a chemical company. The research and development manager is trying to decide whether or not to develop a new solvent that would work at all conditions. It i
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Formulate a marketing mix plan for a travel agency by constructing a minimum of three marketing objectives and goals for each of the marketing mix components, product, price, distr
Recently some Operations Management experts have begun insisting that simple minimizing process velocity, which actually means minimizing the time that it takes to process somethin
Using the data, suppose the manufacturer has an inflated demand forecast as follows: Quantity Probability 2,200 5% 2,300 6% 2,400 10% 2,500 17% 2,600 30% 2,700
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