What are the forecasted levels of the line of credit

Assignment Help Finance Basics

Reference no: EM131403237

Finance Assignment

You boss needs help again.

With the partial model please forecast Zieber's 2017 income statement and balance sheets. Use the following assumptions:

(1) Sales grow by 6%.
(2) The ratios of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, and inventories to sales will be the same in 2017 as in 2016.
(3) Zieber will not issue any new stock or new long-term bonds.
(4) The interest rate is 11% for long- term debt and the interest expense on long-term debt is based on the average balance during the year.
(5) No interest is earned on cash.
(6) Regular dividends grow at an 8% rate. Calculate the additional funds needed (AFN).

If new financing is required, assume it will be raised by drawing on a line of credit with an interest rate of 12%. Assume that any draw on the line of credit will be made on the last day of the year, so there will be no additional interest expense for the new line of credit. If surplus funds are available, pay a special dividend.

• What are the forecasted levels of the line of credit and special dividends? (Hints: Create a column showing the ratios for the current year; then create a new column showing the ratios used in the forecast. Also, create a preliminary forecast that doesn't include any new line of credit or special dividends. Identify the financing deficit or surplus in this preliminary forecast and then add a new column that shows the final forecast that includes any new line of credit or special dividend.)

• Now assume that the growth in sales is only 3%. What are the forecasted levels of the line of credit and special dividends?

Attachment:- Finance_Data.xlsx

Reference no: EM131403237

Questions Cloud

Determining the several different circuits : 1. When a battery is connected to several different circuits, it will cause the same current in each circuit? i know its false but please elaborate

Research on optimal voltage control in distribution network : Topic: Optimal voltage control in distribution network with the presence of distributed generation (distributed wind power supply)

Difference between the actual static friction force : What is the difference between the actual static friction force and the maximum static friction force. Like if you increase an angle downwards the max static friction increases but the actual static friction decreases. Can someone please explain t..

Describe the probable shifts in the demand curves : Electricity when the average temperature in the United States rises during a particular year (Note: The demand curve for electricity in Maine and the demand curve for electricity in Florida should respond in different ways. Why?)

What are the forecasted levels of the line of credit : What are the forecasted levels of the line of credit and special dividends? Now assume that the growth in sales is only 3%. What are the forecasted levels of the line of credit and special dividends?

What color is used to represent the proton : What color is used to represent the proton (hydrogen nucleus)? What does the blue squiggle represent? What atomic nucleus is created in the collision?

Construct the demand curve for the entire market : Consider a market with two consumers, Jasmine and Jim. Draw a demand curve for each of the two consumers, and use those curves to construct the demand curve for the entire market.

Charged capacitor with an energy density : Find the acceleration of a proton released from a point near the positive plate of a charged capacitor with an energy density between the plates of 1.25 x 10^-4 j/m^3.

What is the opportunity cost of the air conditioner : Emily buys an air conditioner that costs $700. Because the air in her home is cleaner, its use saves her $250 in curtain cleaning costs over the lifetime of the air conditioner. In money terms, what is the opportunity cost of the air conditioner?

User Account

All Pages