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Complete Problems 17-7 (one year pro forma statement) and 17-8 (total liabilities estimation and forecast of long-term debt financing need) in your course text. In addition, provide two or more suggestions on what Ambrose Inc. could do to reduce the forecasted debt financing (the managerial part of financing). Be sure to provide rationales as to why your suggestions will be effective in reducing the forecasted debt financing need.17-7: Pro Forma Income Statement - Roberts Inc. (in millions of dollars) 2015 (last year) Change Forecast Formula
1, Sales $3,000.00
2. Operating costs excluding depreciation $2,450.00
3. EBITDA $550.00
4. Depreciation $250.00
5. EBIT $300.00
6. Interest $125.00
7. EBT $175.00
8. Taxes (40%) $70.00
year-end sales are expected to be 10% higher than the 3 billion in sales generated last yearyear-end operation costs, excluding depreciation, are expected to equal 80% of year-end salesDepreciation is expected to increase at the same rate as salesinterest costs are expected to remain unchangedthe tax rate is expected to remain at 40%on the basis of that information what will be the forecast for robert's year-end net income ---- Problem 2
At year-end 2015Total Assets: $1.2 millionAccounts payable $375,000Sales $2.5 million (2015)--- increase sales by 25% in 2016assets and account payable are proportional to sales and grow at same rateno current liabilities other than account payableCommon stock amounted to $245,000 in 2015retained earnings $295,000Plans to sell new common stock in amount of $75,000Profit Margin on sales 6%60% of earnings will be retained What were total liabilities in 2015?
How much new long-term debt financing will be needed in 2016? (hint:AFN-New Stock = New Long-term debt)
A small country imports a product with a world price of $9. The domestic industry is composed of numerous small firms who together have a supply function Q = 2P/3. The domestic demand function is Q = 40 - 2P. There is a tariff of $3 per unit.
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a refresher on how to calculate a riskier investment, when Company A has expected returns of $50,000 and standard diviation of $40,000. Company B has expected returns of $250,000 and standard deviation of $125,000.
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A retailer has offered you two options to purchase kitchen and laundry appliances: A. $3598.88 cash today; or B. a down payment of $912.50 plus three additional identical payments 80 days, 160 days, and 320 days from today.
Assume that the LM curve for a small open economy with a fixed exchange rate is given by Y = 200r - 200 + 2(M/P). This IS curve is given by Y = 400 + 3G - 2T + 3NX - 200r. The function for the net exports is NX = 200 - 100e, where e is the..
The marginal propensity to consume and the marginal income tax rate are 0.9 and 1/3, respectively. The budget deficit is observed to increase by 90. a. What change in investment would account for this
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