Determine the maximum debt ratio the firm can use

Assignment Help Basic Statistics
Reference no: EM13128817

A new firm is developing its business plan. It will require $600,000 of assets, and it projects $435,000 of sales and $350,000 of operating costs for the first year. The firm is quite sure of these numbers because of contracts with its customers and suppliers. It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. What is the maximum debt ratio the firm can use?

Reference no: EM13128817

Questions Cloud

Example on international monetary fund : What are the extreme liberal, embedded liberal, economic nationalist and Marxist view on the International Monetary Fund (IMF)?
Calculate the number of shares to be used in determining : The average market price during 2004 was $50. Calculate the number of shares to be used in determining diluted earnings per share for 2004.
Personal narrative : personal narrative
Making consolidated financial statements : Give the eliminating entries needed at December 31, 2008, to prepare consolidated financial statements.
Determine the maximum debt ratio the firm can use : A TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. What is the maximum debt ratio the firm can use?
What percentage of variation in scores on second round : What percentage of the variation in their scores on the second round can be explained by their scores on the first round?
Karl marx theory : How does migration maintain the position of elites in society? Answer this question using the conflict perspective (Karl Marx Theory).
What percentage of estimated who approve of human cloning : The pollsters can be 95% confident that the true proportion of adults who approve of human cloning is within what percentage of the estimated 11.7%?
Paper one find job postings : Paper one Find Job postings associated with your major( from career zone and internet) and write a 1 page paper that discussed how you prepare to plan to become qualified for each.

Reviews

Write a Review

Basic Statistics Questions & Answers

  The mean and standard deviation for the process

We are establishing a quality control program for a process and need to establish the mean and standard deviation for the process. The first 10 batches had samples of size 5 taken.

  Probability-randomly chosen employee

Let A be the event that a randomly chosen employee has a college degree and B the event that the chosen employee's income is more than $50,000.

  Using statistical analysis technique to solve the problem

How should she proceed? What additional data (if any) is needed? Which statistical analysis technique should be used? Can an analysis be performed? Why or why not?

  Probability all four of selected homes have security system

Four homes are selected at random: What is the probability all four of the selected homes have a security system? (Round your answer to 4 decimal places.

  Equations of square trend

Determine the least squares equation. According to this information, what are the estimated sales for 2005? Listed below is the net sales in $ million for Home Depot, Inc. and its subsidiaries from 1993 to 2002.

  Determine if there are any outliers in sample mean

Given that the sample mean is x¯=93.81, and the sample standard deviation is s=4.65, determine if there are any outliers. (We will define an outlier to be any data value outside of the x¯+_2s range.)

  Sample size determination

A member of Congress wants to determine her popularity in a certain part of the state. She indicates that the proportion of voters who will vote for her must be estimated within plus or minus 2 percent of the population proportion.

  Chebyshev theroem and emprical rule

Use Chebyshev's theorem to find what percent of the values will fall between 241 and 349 for a data set with a mean of 295 and standard deviation of 18.

  Computing five key percentiles for data

Compute mean, standard deviation, coefficient of variation and 5 key percentiles for these data.

  Solving and simplifying equations

Write in interval notation the real numbers greater than or equal to 3 and less than 9. Translate the verbal expression into an algebraic expression: a cubed minuis b cubed.

  Finding the probability of a pointer

Finding the probability of a pointer to land in a color among given three colors.

  Evaluate proportion of customers are satisfied supermarket

You wish to evaluate the proportion of customers who are satisfied with their supermarket at level of confidence of .92 and in .025 of true value. How large of sample is required?

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