Parramore Corp has $11 million of sales, $2 million of inventories, $2 million of receivables, and $2.75 million of payables. Its cost of goods sold is 70% of sales, and it finances working capital with bank loans at a 7% rate. Assume 365 days in year for your calculations. How much cash would be freed up, if Parramore could lower its inventories and receivables by 8% each and increase its payables by 8%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar. I keep getting 100,000  and its says its wrong can you show me what I am doing wrong

Eagle Products’ EBIT is $500, its tax rate is 35%, depreciation is $25, capital expenditures are $65, and the planned increase in net working capital is $30. What is the free cash flow to the firm?

Donuts Galore spends $42 million installing donut makers in all its stores. This is expected to increase cash flows by $11.5 million per year for the next seven years. If the discount rate is 5.5%, was Donut Galore correct in making the decision to install donut makers? a. Yes, as it has a net present value (NPV) of $107.35 million. b. No, as it has a net present value (NPV) of – 107.35 million. c. Yes, as it has a net present value (NPV) of $23.35 million. d. No, as it has a net present value (NPV) of -$38.57 million.

Last year, Cayman Corporation had sales of $26 million, total variable costs of $15 million, and total fixed costs of $5,000,000. In addition, they paid $4 million in interest to bondholders. Cayman has a marginal tax rate of 21 percent. If Cayman's sales increase by 15%, what should be the increase in operating income?

Tinberg 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.

Shabbona Partners expects to have free cash flows of $38,950,000 next year, and free cash flows are expected to grow at a constant rate of 3% per year. If the firm's WACC is 9% per year, what is the value of Shabbona's operations?

Steber Packaging Inc. expects sales next year of $40 million. Of this total, 45 percent is expected to be for cash and the balance will be on credit, payable in 30 days. Operating expenses are expected to total $17 million. Accelerated depreciation is expected to total $12 million, although the company will only report $8 million of depreciation on its public financial reports. The marginal tax rate for Steber is 34 percent. Current assets now total $26 million and current liabilities total $14 million. Current assets are expected to increase to $29 million over the coming year. Current liabilities are expected to increase to $20 million. Compute the projected after-tax operating cash flow for Steber during the coming year. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $    million

The MoMi Corporation’s cash flow from operations before interest and taxes was $2 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 20% of pretax cash flow each year. The tax rate is 35%. Depreciation was $200,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The appropriate market capitalization rate for the unleveraged cash flow is 12% per year, and the firm currently has debt of $4 million outstanding. Use the free cash flow approach to value the firm’s equity.

Ohio Quarry Inc. has $20 million in assets. Its expected operating income (EBIT) is $4 million and its income tax rate is 40 percent. If Ohio Quarry finances 20 percent of its total assets with debt capital, the pretax cost of funds is 10 percent. If the company finances 40 percent of its total assets with debt capital, the pretax cost of funds is 15 percent. Round your answers to the questions below to two decimal places. Determine the rate of return on equity (ROE) under the three different capital structures (0, 20, and 40% debt ratios).0% debt ratio:    % 20% debt ratio:    % 40% debt ratio:    % Which capital structure yields the highest expected ROE? yields the highest expected ROE. Determine the ROE under each of the three capital structures (0, 20, and 40% debt ratios) if expected EBIT decreases by 40 percent.0% debt ratio:    % 20% debt ratio:    % 40% debt ratio:    % Which capital structure yields the highest ROE calculated in part c? yields the highest expected ROE.…

Stratosphere Wireless is examining its cash conversion cycle. The company expects its cost of goods sold, which equals 60 percent of sales, to be $144,000 this year. Stratosphere normally turns over inventory 24 times per year, accounts receivable is turned over 12 times per year, and the accounts payable turnover is 45. Assume there are 360 days in a year.   Calculate the cash conversion cycle. Round your answer to the nearest whole number.   days Calculate the average balances in accounts receivable, accounts payable, and inventory. Round your answers to the nearest dollar. Accounts receivable: $   Accounts payable: $   Inventory: $