User Account

All Pages

Find what is maximum additional amount that otto can borrow

Assignment Help Financial Accounting
Reference no: EM132806759

On Dec 31, 2019, OTTO Inc. has total assets of $414,000 and total equity of $245,000. The company will raise additional capital through debt and equity. The company will issue 73,025 shares of common stock at $4 per share and in addition it intends to borrow as much as it can from a bank. The bank, however, requires a maximum debt-to-asset ratio of 0.7.

Problem 1: What is the maximum additional amount that Otto can borrow after the additional stock is issues?

a. $1,084,233
b. $295,671
c. $689,900
d. $669,511

Reference no: EM132806759

Questions Cloud

How an understanding of thriving has enabled you : Describe how an understanding of thriving, your positive identity, and character strengths has enabled you to consider those elements within your workplace.
What type of bond it is : The yield to maturity on these bonds is currently 10 percent. The bonds mature in 5 years, What type of bond it is? What is the annual coupon interest rate
Which theory most influences personal view of leadership : A core component of administering an early childhood program is having a knowledge base of early childhood theory. As educators, it is often easier to see.
Case Study Question - Identify the type of fraud : Case Study Question - Identify the type of fraud - What is the purpose of such a fraud identified in (a) above
Find what is maximum additional amount that otto can borrow : Find what is the maximum additional amount that Otto can borrow after the additional stock is issues? The company will raise additional capital through debt
Explain the delegation process : Good leaders delegate and allocate work appropriately, understanding that they cannot do everything themselves and that other people have skills
Analyze the risks obtained from karunika companies : Analyze the risks obtained from Karunika Companies and Investors. Karunika company, requires capital to buy factory equipment of IDR 750,000,000.00 by finding
Solve for the cost of goods sold to be debited on sale : Given the following, solve for the Cost of Goods Sold to be debited on sale of 250 bottles during Feb 1 using: FIFO method
What should trump report on the income statement : Trump Company, What should Trump report on its 2015 income statement as a result of the increase in fair value of the investments in 2015?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Evaluate and present the difference in eps and net income

Determine EPS under IFRS rules; Criticize and Defend IFRS Accounting; Evaluate and present the difference in EPS and Net Income between US GAAP and IFRS;

  Computing ending inventory and cost of goods sold under

computing ending inventory and cost of goods sold under fifo and lifo cost-flow assumptions.cost flow assumptions -

  Compute the marginal and average and effective tax rates

Compute the marginal, average and effective tax rates. Charles is a single taxpayer has the income and deductions for the current tax year.

  Plot the projects NPV profile

The land must be returned to its natural state at a cost of $12 million, payable at the end of Year 2. Plot the projects NPV profile

  The effect on the accounts and the financial statements

The effect on the accounts and the financial statements of the payment of an ordinary note is:

  Accorsi & sons specializes in selling and installing

Accorsi & Sons specializes in selling and installing upscale home theater systems. On March 1, 2016, Accorsi sold a premium home theater package that includes a projector, set of surround speakers, and high quality leather seats, along with comple..

  Employees rarely use a special payroll

Companies with many employees rarely use a special payroll bank account from which to pay employees

  What is the overall impact on cash from all the items

Categorize each item as a source of funds, use of funds, or none. Then, what is the overall impact on cash from all the items combined?

  Units of product should be processed further or not

Cobe Company has already manufactured 24,000 units of Product A at a cost of $25 per unit. The 24,000 units can be sold at this stage for $450,000. Alternatively, the units can be further processed at a $250,000 total additional cost and be converted..

  What is the impairment loss

The valuation of the land by a certified professional valuer is $3.8m. A comparable piece of land is selling for $3.9m. What is the impairment loss

  Determine the cost of assigned

Determine the cost of assigned to ending inventory and to cost of goods sold

  Prepare the journal entry to record pension expense

Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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