How i find the decrease in cash? (Liquidity Analysis) The King Carpet Company has $2,830,000 in cash and a total of $11,300,000 in current assets. The firm's current liabilities equal $5,040,000 such that the firm's current ratioequals 2.2. The company's managers want to reduce the firm's cash holdings down to $1,100,000 by paying $564,000 in cash to expand the firm's truck fleet and using $1,166,000 in cash to retirea short-term note. If they carry this plan through, what will happen to the firm's current ratio?The new current ratio is (Round to one decimal place.)View an example Get more help.2F2WSXmmand#3802F3ED$4सC990000F4RF%5VF5TGA6MacBook AirBFOY&7H44UN30 *8JPIIFG1M19KMOSISODDF9O<0LFIGClear allPcommand>●…. ..4FIII=Check answer{1[?option"141F12}1delete CURRENT ASSETS-CURRENT RATIO = DECREASE IN CASHCURRENT LIABILITIES-DECREASE INSHORT-TERM NOTES11300000-15040000-11660002.2

following information is provided : Current assets = $11300000cash before plan is carried =…

Answered: (Liquidity Analysis) The King Carpet…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 17MC

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(Liquidity Analysis) The King Carpet Company has $3,190,000 in cash and a total of $12,490,000 in current assets. The firm's current liabilities equal $5,020,000 such that the firm's current ratio equals 2.5. The company's managers want to reduce the firm's cash holdings down to $1,090,000 by paying $566,000 in cash to expand the firm's truck fleet and using $1,534,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio? The new current ratio is (Round to one decimal place.)
(Liquidity Analysis) The King Carpet Company has $3,150.000 in cash and a total of $12,480,000 in curent assets. The firm's current liabilities equal 56,670,000 such that the firm's current ratio equals 1.9. The company's managers want to reduce the firm's cash holdings down to $1,040,000 by paying $556,000 in cash to expand the fem's truck feet and using $1,554,000 in cash to retre a short-term note if they carry this plan through, what will happen to the firm's current ratio? The new current ratio is (Round to one decimal place) -CHED-
The King Carpet Company has $2,910,000 in cash and a total of $12,780,000 in current assets. The firm's current liabilities equal $5,940,000 such that the firm's current ratio equals 2.2. The company's managers want to reduce the firm's cash holdings down to $1,160,000 by paying $591,000 in cash to expand the firm's truck fleet and using $1,159,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
(Liquidity analysis) Airspot Motors, Inc. has $2,172,500 in current assets and $869,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.1 (assuming all other current assets and current liabilities remain constant)?
The King Carpet Company has $3,010,000 in cash and a total of $12,110,000 in current assets. The firm's current liabilities equal $5,630,000 such that the firm's current ratio equals 2.2 The company's managers want to reduce the firm's cash holdings down to $1,180,000 by paying $560,000 in cash to expand the firm's truck fleet and using $1,270,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio? The new current ratio is ? (round 2 decimals)
Jupiter Inc.’s directors are considering expanding their operations in foreign markets. They estimate that the cost of expansion is approximately $42 million. The company’s CFO has estimated that new foreign operations will generate the following cash flows: Year 1 = $2,120,000 Year 2 = $2,838,000 Year 3 = $3,480,000 Year 4 = $4,570,000 Year 5 onward, the cash flow stream is going to stabilize at $5,500,000 which is going to continue forever. Given that the company’s required rate of return is 11%, what is the NPV of the project?
Copmany A. has $2,491,100 in current assets and $859,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.2 (assuming all other current assets and current liabilities remain constant)?
Goldilochs Inc. reported sales of $8 million and net income of $1.5 million. The firm has $10.5 million in total assets and $1 million in current liabilities. The firm currently pays out 75 percent of its net income to shareholders. Assume that all assets and current liabilities are expected to grow with sales. If Goldilochs does not want to rely on any external sources of funds, what is the most sales can grow (in chars)? $187,900 $299,900 $328,800 $364,100
(Related to Checkpoint 4.1) (Liquidity analysis) Airspot Motors, Inc. has $2,517,200 in current assets and $868,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.1 (assuming all other current assets and current liabilities remain constant)? Airspot Motors, Inc. could add up to $ in inventories. (Round to the nearest dollar.)
Airspot Motors, Inc. has $2,343,600 in current assets and $868,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.1 (assuming all other current assets and current liabilities remain constant)?
KMS corporation has assets of $650 million, $65 million of which are cash. It has debt of $216.7 million. If KMS repurchases $21.7 million of its stock: a. What changes will occur on its balance sheet? b. What will be its new leverage ratio? a. What changes will occur on its balance sheet? (Select the best choice below.) A. Both the cash balance and shareholder equity will drop by $21.7 million. B. Both the cash balance and shareholder equity will increase by $21.7 million. C. Both accounts receivable and shareholder equity will drop by $21.7 million. D. Debt will increase by $21.7 million and shareholder equity will decrease by $21.7 million. b. What will be its new leverage ratio? The new leverage ratio after the repurchase is %. (Round to one decimal place.)
Airport Motors, Inc. has $2,305,800 in current assets and $854,000 in current liabilities. The managers want to increase the firm’s inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below a 2.1, (assuming all other current assets and current liabilities remain constant)?

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