User Account

All Pages

Current ratio

Assignment Help Finance Basics
Reference no: EM13655574

Land Recovery is investigating several forms of financing assets. The organization's income tax rate is 40%. Assume the organization has decided to use $30 million in current assets and $35 million in fixed assets in it operations next year, with EBIT ($6 million), and anticipated sales ($60 million). Stockholders' equity will be used to finance $40 million of assets, with the remainder financed by short and Long term debt. The organization is considering implementing one of the policies in the diagram

Amount of Short-Term Debt
Financial Policy ShortTerm Debt (Millions) LTD (%) STD (%)
Option 1 $24 8.5 5.5
Option 2 $18 8.0 5.0
Option 3 $12 7.5 4.5

Determine the following or each policy:
Current ratio
Net Working capital position
Expected rate of return on stockholders' equity  

Reference no: EM13655574

Questions Cloud

Managers of virtual teams face : What are two unique challenges that managers of virtual teams face?
Minimum horizontal force that will get the cart up the step : A garden cart loaded with firewood is being pushed horizontally when it encounters a step h = 7.0 cm high, as shown in Fig. 12.20. The mass ofthe cart and its load is55 kg, and the cart is balanced so that its center of mass is directly overthe ax..
Over what distance must the lens be movable : To focus a camera on objects at different distances, the converginglens is moved toward or away from the image sensor, so a sharpimage always falls on the sensor. A camera with a telephotolens (f = 440 mm) is to befocused on an object located firs..
What is the total magneticflux through the surface : A 0.150 T magnetic field B crosses the xyplane perpendicular to the x axis and at an angle of45.0° to the y axis. A square surfacewith sides of length 7.00 m lies mainly in the xyplane, but a 1.50 m section of it at one end is bent 90°in the negat..
Current ratio : Current ratio
What is the magnification produced by the eyepiece : An amoeba is 0.00515m away from the objective lens of a microscope. if the objective lens has a focal length of 0.005m, where is the image formed by the objective? What is the magnification of this image?
What internet business model would be appropriate : What Internet business model would be appropriate for the company to follow in creating a Web site and why?
Definition and use of currency options : Definition and use of Currency Options
Two rectangular pieces of plane glass-find angle of wedge : Two rectangular pieces of plane glass are laid one upon the otheron a table. A thin strip of paper is placed between them at oneedge, so that a very thin wedge of air is formed. The plates areilluminated at normal incidence by 546 nm light from a ..

Reviews

Write a Review

Finance Basics Questions & Answers

  If the appropriate interest rate is 725 percent what is the

trigen corp. management will invest cash flows of 876660 634483 483288 818400 1239644 and 1617848 in research and

  Risk-free covered interest arbitrage

Critically discuss the transactions you would make to earn the risk-free covered interest arbitrage profits. How much profit would you expect to make?

  How much will he have to save each month

He can afford to save $4,100 per month for the next 10 years. If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 11 through 30?

  It is also likely to go down by 20 if the stock market goes

a project i is likely to go up by 20 if the stock market goes up by 10. it is also likely to go down by 20 if the

  Determine the discounted payback period

Determine the discounted payback period (in years) for a project that costs $1,000 and would yield after-tax cash flows of $525 the first year, $485 the second year, $445 the third year, and $405 for the fourth year. The firm's cost of capital is ..

  At what discount rate would you be indifferent

At what discount rate would you be indifferent between these two plans?

  Should the firm purchase the machine

In Excel, calculate net revenue, or the revenue from the investment minus the costs; the present value coefficient for every year; and the present value of the net revenue. Add together column F to get the net present value of the project. Should ..

  From the foregoing data calculate financial ratios for the

the following are comparative data for sunshine state equipment inc. for the 3-year period 2006-2008.income statement

  What is the first step of capital

what is the first step of capital budgeting?a. gathering the money for the investmentb. identifying potential

  What is the current cost of common equity for the firm

What is the current cost of common equity for the firm? (Round intermediate calculations to 4 decimal places, and final answer to 2 decimal places.)

  Calculate the value of security

Calculate the value of security and Value the financial instrument below using excel functions

  How the beta of a portfolio can equal the market beta

Explain how the beta of a portfolio can equal the market beta if 50 percent of the portfolio is invested in a security that has twice the amount of systematic risk as an average risky security.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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