Manalo Inc. had the following data for 2019 (in millions). The new CFO believes that the company could improve its working capital management sufficiently to bring its NWC and CCC up to the benchmark companies' level without affecting either sales or the costs of goods sold. Manalo finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the

Manalo Inc. had the following data for 2019 (in millions). The new CFO believes that the company could improve its working capital management sufficiently to bring its NWC and CCC up to the benchmark companies' level without affecting either sales or the costs of goods sold. Manalo finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the

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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Manalo Inc. had the following data for 2019 (in millions). The new CFO believes that the company could improve its working capital management sufficiently to bring its NWC and CCC up to the benchmark companies' level without affecting either sales or the costs of goods sold. Manalo finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the firm's pre-tax income have increased?
Xanax Inc expects the following transaction in 2020. Their first year of operations.· Allowance for bad debts, end of year is 80,000· Sales (some receivables are collectible in 2021) 1,500,000· Bad debt written offs during the year 10,000· Disbursements of costs and expenses 1,200,000· Disbursements for income taxes 90,000· Accounts receivable, end of year, net- 70,000· Purchases of fixed assets for cash 400,000· Proceeds from issuance of ordinary shares 580,000· Proceed from short-term borrowings 100,000· Payments on short-term borrowings 60,000· Depreciation on fixed assets 80,000· Loss on sale of fixed assets (book value 100,000) 10,000What is the cash balance at December 31, 2020?
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.)
ssume that today is December 31, 2018, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2019 is expected to be $500 million. The depreciation expense for 2019 is expected to be $180 million. The capital expenditures for 2019 are expected to be $400 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 6% per year. The required return on equity is 15%. The WACC is 10%. The firm has $200 million of non-operating assets. The market value of the company's debt is $3.096 billion. 340 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $
X Corporation expects the following transaction in 2020. Their first year of operations.· Allowance for bad debts, end of year is 80,000· Sales (some receivables are collectible in 2021) 1,500,000· Bad debt written offs during the year 10,000· Disbursements of costs and expenses 1,200,000· Disbursements for income taxes 90,000· Accounts receivable, end of year, net- 70,000· Purchases of fixed assets for cash 400,000· Proceeds from issuance of ordinary shares 580,000· Proceed from short-term borrowings 100,000· Payments on short-term borrowings 60,000· Depreciation on fixed assets 80,000· Loss on sale of fixed assets (book value 100,000) 10,000What is the cash balance at December 31, 2020? • 470,000 • 300,000 • 390,000 • 370,000 • None of the above
X Corporation expects the following transaction in 2020. Their first year of operations.· Allowance for bad debts, end of year is 80,000· Sales (some receivables are collectible in 2021) 1,500,000· Bad debt written offs during the year 10,000· Disbursements of costs and expenses 1,200,000· Disbursements for income taxes 90,000· Accounts receivable, end of year, net- 70,000· Purchases of fixed assets for cash 400,000· Proceeds from issuance of ordinary shares 580,000· Proceed from short-term borrowings 100,000· Payments on short-term borrowings 60,000· Depreciation on fixed assets 80,000· Loss on sale of fixed assets (book value 100,000) 10,000What is the cash balance at December 31, 2020? a. 470,000 b. 300,000 c. 390,000 d. 370,000 e. None of the above
Chifuyu Bank loaned P10,000,000 to Baji Company on January 1, 2020, the terms of the loan require principal payments of P2,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on December 31, 2020. Baji made the required payments on December 31, 2020, and December 31, 2021. However, Baji began to experience financial difficulties during 2022 which requires the bank to reassess the collectibility of the loan. On December 31, 2022, the bank determined that the remaining principal payments will be collected but the collection of the interest is unlikely. The bank accrued the interest for 2022. Expected Principal Payments December 31, 2023 P3,000,000 December 31, 2024 2,000,000 December 31, 2025 1,000,000 Note: Round off present value factors up to four decimal points; round off the final value up to two decimal points. E.g., 0.7812 and 123,518.25 Questions: How much is the impairment loss to be recorded in 2022? How much is the…
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2020 is expected to be $650 million. The depreciation expense for 2020 is expected to be $120 million. The capital expenditures for 2020 are expected to be $500 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 7% per year. The required return on equity is 16%. The WACC is 9%. The firm has $199 million of non-operating assets. The market value of the company's debt is $4.177 billion. 250 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $ ?
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2020 is expected to be $550 million. The depreciation expense for 2020 is expected to be $70 million. The capital expenditures for 2020 are expected to be $325 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 6% per year. The required return on equity is 14%. The WACC is 11%. The firm has $206 million of non-operating assets. The market value of the company's debt is $4.799 billion. 70 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $ Answer is NOT 204.4 or 204.39
Groudon Bank loaned P12,000,000 to Kyogre Company on January 1, 2020, the terms of the loan require principal payments of P2,000,000 each year for 6 years plus interest at 6%. The first principal and interest payment is due on December 31, 2020. Kyogre made the required payments on December 31, 2020, and December 31, 2021. However, Kyogre began to experience financial difficulties during 2022 which requires the bank to reassess the collectibility of the loan. On December 31, 2022, the bank determined that the remaining principal payments will be collected but the collection of the interest is unlikely. The bank did not accrue the interest for 2022. Expected Principal Payments December 31, 2024 P4,000,000 December 31, 2025 2,500,000 December 31, 2026 1,500,000 Note: Round off present value factors up to four decimal points; round off the final value up to two decimal points. E.g., 0.7812 and 123,518.25 Questions: How much is the impairment loss to be recorded on December…
A corporation makes a payment of $1.25 million at the end of 2017 for services rendered by a large database company. With an annual interest rate of 18%, what annual payments at the end of years 2017 through 2022 will be equivalent to $1.25 million at the end of 2017?
Q3) Referring to the following data of the Omani Company, answer A and B: The company manager targets to increase the current ratio in the year (2021) by 30% out of the previous year (2020), this requiring to increase the amount of the total current asset. To what level can the manager increase the total current asset to achieve this target (30%) at (2021)? The manager put a plan to increase the Time interest Earns (TIE) in the (2021) by (17%) out of the previous year (2020) to increase sales. How much will this plan to add amount to the accounts receivable Data of 2020 Total Asset Turnover 2.5 Times Net Fixed Asset 600 (OMR) Total Liabilities 500 (OMR) Sales 2000 (OMR) Quick Ratio 1.5 Times Accounts Receivable 150 (OMR) Long-term Liabilities 200 (OMR)