Antivirus Inc. expects its sales next year to be $3,100,000. Inventory and accounts receivable will increase by $540,000 to accommodate this sales level. The company has a steady profit margin of 15 percent with a 35 percent dividend payout. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.
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Antivirus Inc. expects its sales next year to be $3,100,000. Inventory and accounts receivable will increase by $540,000 to accommodate this sales level. The company has a steady profit margin of 15 percent with a 35 percent dividend payout.
How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.
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- Tobin Supplies Company expects sales next year to be $490,000. Inventory and accounts receivable will increase $75,000 to accommodate this sales level. The company has a steady profit margin of 20 percent with a 50 percent dividend payout. How much external financing will Tobin Supplies Company have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.Bondi Beachwear Company expects sales next year to be $310,000. Inventory and accounts receivable will have to be increased by $65,000 to accommodate this sales level. The company has a steady profit margin of 15 percent, with a 10 percent dividend payout. How much external funding will Bondi Beachwear Company have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing. External funds neededTinberg Cans expects sales next year to be $50,000,000. Inventory and accounts receivable (combined) will increase $8,000,000 to accommodate this sales level. The company has a profit margin at 6%. Its dividend payout is 30% of profit. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.
- Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the table below. Happy Time now only has one outstanding debt with a face value of $110 million to be repaid in the next year. The current market value for the debt is $67 million. The tax rate is zero. If you invest in the corporate debt of Happy Time Inc. today, what is your expected percentage return on this investment? Cash flow in the next year Economy Probability Amount Boom 0.3 Normal 0.4 Recession 0.3 O 36.87% O -26.37% 64.8% O-16.63% $110 million $101 million $61 millionABC Company expects sales next year to be $1,450,000, up from $600,000 this year. Inventory and account receivable will increase by $200,000 to accommodate this higher sales level. The company has a steady profit margin of 10%, and has historically paid out 20% of after tax earnings as dividends. How much external funding will the company have to take on? Assume there is no increase in liabilities other than that which will occur with the external financing.The finance staff at Millcreek Company have constructed a forecast of the company’s net income.The chief executive officer (CEO) of Millcreek wonders why the forecast of next year’s interestexpense is the same as this year’s interest expense, whereas next year’s sales are expected toincrease by 20% over this year’s sales. What is the most likely explanation?a) Millcreek is expected to be more aggressive at minimizing its income tax expense next yearb) Millcreek expects its operating expenses to increase by 20% next year, the same as the expectedincrease in salesc) Millcreek is not expected to obtain any new loans next year, not repay any old loansd) Millcreek expects its operating expenses to increase by more than 20% increase in salesexpected next year
- Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the table below. Happy Time now only has one outstanding debt with a face value of $110 million to be repaid in the next year. The current market value for the debt is $67 million. The tax rate is zero. If the firm is financed by common equity and debt, what is the expected value of common equity next year? Cash flow in the next year Probability Amount Economy Boom 0.3 $110 million Normal 0.4 $101 million Recession 0.3 $61 million $26.8 million $24.7 million $0 -$18.3 millionExpected sales in the forthcoming year is $ 50,00. The firm plans to stick to the following policies towards the working capital; Debtors would be maintained at 30 days of sales, Creditors would be maintained at 30 days of cost of sales and Inventories would be maintained at 30 days of cost of sales. Assume that the firm wants to keep Working capital sufficient to finance Expected Credit Sales for the length of the Cash Cycle, how much working capital would the firm need? Consider 365 as the number of days in an year for you cycle calculations. (Select the option closest to the answer). 411 487 398 509 426 352The company has sales of $ 10 million per year, all of which are from credit terms that require payment to be made within 30 days, and the company's account receivables amount to $ 2 million. What is the DSO of the company, what is the value if all borrowers pay on time, and how much capital will be released if the company takes actions that lead to timely payment?
- The table below shows the forecast cash flow information of Good Time Inc. for the nextyear. The required debt payment in the next year is $88 million, with a current market valueof $60 million. The company pays no tax. If you invest in the corporate debt of Good TimeInc. today, what is your expected return on this investment? hand write please(Forecasting financing needs) Beason Manufacturing forecasts its sales next year to be $5.4 million and expects to earn 4.9 percent of that amount after taxes. The firm is currently in the process of projecting its financing needs and has made the following assumptions (projections): • Current assets are equal to 19.8 percent of sales, and fixed assets remain at their current level of $0.8 million. • Common equity is currently $0.78 million, and the firm pays out half of its after-tax earnings in dividends. The firm has short-term payables and trade credit that normally equal 11.8 percent of sales, and it has no long-term debt outstanding. What are Beason's financing needs for the coming year? Beason's expected net income for next year is $ (Round to the nearest dollar.)The table below shows the forecast cash flow information of Good Time Inc. for the next year. The required debt payment in the next year is $88 million, with the current market value of $75 million. The company pays no tax. If you invest in the corporate debt of Good Time Inc. today, what is your expected return on this investment? Cash flow in the next year Economy Probability Amount Boom 0.6 $148 million Recession 0.4 I$61 million O 18.77% O 10.29% O 2.93% O 28.67%