Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Long-term Financing Needed
At year-end 2013, Wallace Landscaping's total assets were $1.6 million and its accounts payable were $450,000. Sales, which in 2013 were $2.2 million, are expected to increase by 20% in 2014. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $440,000 in 2013, and retained earnings were $300,000. Wallace has arranged to sell $85,000 of new common stock in 2014 to meet some of its financial needs. The remainder of its financing needs to be met by issuing new long-term debt at the end of 2014. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt). Its profit margin on sales is 7%, and 45% of earnings will be paid out as dividends.
a. What was Wallace's total long-term debt in 2013? Round your answer to the nearest dollar.
b. What were Wallace's total liabilities in 2013? Round your answer to the nearest dollar.
c. How much new long-term debt financing will be needed in 2014? (Hint: AFN = New long-term debt). Round your anser to the nearest dollar.
You are considering two savings options that each provide a rate of return of 4.65 percent. The first option requires annual savings of $2,000, $2,500, and $3,000 over the next three years, respectively, with the first deposit due one year from today..
You want to buy a car, and a local bank will lend you $30,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 7% with interest paid monthly. What will be the monthly loan payment?
Assuming a discount rate of 8%, what is the present value of $50 received at the end of each year for 20 years? And what is the formula if the $50 were to be received at the beginning of the year?
H.Ibsen Corporation hired you as a consultant to help them estimate its cost of capital. You have been provided with the following data: D0 = $1.36; P0 = $20.50; and g = 6.50% (constant). Based on the DCF approach, what is the cost of equity from ret..
what additional savings in resource investment costs will result for the shortened cash conversion cycle, assuming that the level of sales remains constant?
Define Purchasing Power Parity (PPP) theory. Based on PPP, would you expect the price of a TV to be the same in India as it is in Australia? Give reasons to justify your answer
Krystal Magee invested $150,000 17 months ago. Currently the investment is worth $170,000. Krystal knows that the investment paid interest monthly, but she does not know what yield on her investment. What is Krystal's annual percentage return (APR) a..
The investment timing decision relates to:
When returns from a project can be assumed to be normally distributed, such as those shown in Figure 13-6 (represented by a symmetrical, bell-shaped curve), the areas under the curve can be determined from statistical tables based on standard deviati..
Six-month T-bills have a nominal rate of 4%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 2%. In the spot exchange market, 1 yen equals $0.0059. If interest rate parity holds, what is the 6-month forward exchange r..
Deferred annuity is purchased with annual payments for twenty-five years. The first payment of 500 starts at the end of the tenth year and subsequent payments increase 3% per year. Find the purchase price of the annuity if the effective annual intere..
When an asset is sold, there are four possible tax situations that arise. Which of the following is one of the possible tax situations?
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd