Looking forward to next year, if Baldwin's current cash balance is $20,926,712 and Cash Flows From Operations next period areunchanged from this period, which of the following activities will expose Baldwin to the most risk of needing an emergency loan?Issues 10,000 shares of stock at the current stock pricePurchases assets at a cost of $25,000,000Sells $10,000,000 of their Long-Term AssetsRetires $10,000,000 in Long-Term Debt

Loan are debt that carry the amount of interest to be paid and it is liability for the company and…

Looking forward to next year, if Baldwin's current cash balance is $20,926,712 ar unchanged from this period, which of the following activities will expose Baldwin Issues 10,000 shares of stock at the current stock price O Purchases assets at a cost of $25,000,000 Sells $10,000,000 of their Long-Term Assets O Retires $10,000,000 in Long-Term Debt

Looking forward to next year, if Baldwin's current cash balance is $20,926,712 ar unchanged from this period, which of the following activities will expose Baldwin Issues 10,000 shares of stock at the current stock price O Purchases assets at a cost of $25,000,000 Sells $10,000,000 of their Long-Term Assets O Retires $10,000,000 in Long-Term Debt

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter16: Financial Planning And Forecasting

Section: Chapter Questions

Problem 8P: LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and...

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LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and accounts payable were 450,000. Sales, which in 2019 were 3.0 million, are expected to increase by 25% in 2020. 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. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to 500,000 in 2019, and retained earnings were 475,000. Arrington plans to sell new common stock in the amount of 130,000. The firms profit margin on sates is 5%; 35% of earnings will be retained. a. What were Arringtons total liabilities in 2019? b. How much new long-term debt financing will be needed in 2020? (Hint: AFN - New stock = New long-term debt.)
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