How much new long term debt financing will be needed

Assignment Help Financial Management

Reference no: EM131575410

Long - term financing needed At year - end 2014, total assets for Ambrose Inc. were exist1.9 million and accounts payable were exist450,000. Sales, which in 2014 were exist2.9 million, are expected to increase by 20% in 2015. Total assets and accounts payable are proportional to sales, and that relationship will be maintained: that is, they will grow at the same rate as sales. Ambrose typically uses no current liabilities other than accounts payable. Common stock amounted to exist440,000 in 2014, and retained earnings were exist250,000. Ambrose plans to sell new common stock in the amount of exist120,000. The firms profit margin on sales is 5%: 40% of earnings will be retained.

a. What was Ambrose's total debt in 2014? Write out your answer completely. For example, 25 million should be entered as 25,000,000.

Round your answer to the nearest cent. exist

b. How much new long - term debt financing will be needed in 2015? Write out your answer completely. For example, 25 million should be entered as 25,000,000.

Round your answer to the nearest cent. exist.

Reference no: EM131575410

Questions Cloud

How should today pm assess risk to projects : Many projects fail because risk is not properly identified and addressed. How should today's PM assess risk to projects?

Calculate the amount a person would need to deposit today : Calculate the amount a person would need to deposit today with a 5 percent intrest rate to have $2000 in 3 years.

Soundness and adequacy of original investment plan : Evaluate the current soundness and adequacy of the original investment plan.

About project net present value and internal rate of return : If the profitability index (PI) of the project is 1.0. /what do you know about the project's net present value (NPV) and its internal rate of return (IRR)?

How much new long term debt financing will be needed : What was Ambrose's total debt in 2014? How much new long - term debt financing will be needed in 2015?

State wide solid waste management act : In 1998, the state legislature of Illinois added the Solid Waste Import Restrictions to its State Wide Solid Waste Management Act.

Will the yield to maturity on the two bonds differ : Will the yield to maturity on the two bonds differ?

Show project cash flow for the next five years of project : Show Project Cash Flow for the next five years of the project. Assuming a discount rate of 15% would you recommend the project, why/why not?

Options offer unique investing possibilities : Options offer unique investing possibilities not available in conventional investment alternatives.

User Account

All Pages