Shorter Company had originally expected to earn operating income of $130,000 in the coming year. Shorter's degree of operating leverage is 2.4. Recently, Shorter revised its plans and now expects to increase sales by 20% next year. What is the percent change in operating income expected by Shorter in the coming year?

Jim's Espresso expects sales to grow by 10.3% next year.​ Jim's changes its payout ratio from 90% to 75% of net income next year. When the payout ratio was 90%​, there was excess financing in the amount of $4,199. ​Jim's developed the pro forma financial statements given here LOADING... to reflect the change in the payout ratio to 75%. How will the net new financing​ change? The Tax Cuts and Jobs Act of 2017 temporarily allows​ 100% bonus depreciation​ (effectively expensing capital​ expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement    Sales    $228,078Costs Except Depreciation    (109,781)EBITDA    $118,297Depreciation    (6,574)EBIT    $111,723Interest Expense (net)    (474)Pretax Income    $111,249Income Tax    (38,937)Net Income    $72,312   Balance Sheet    Assets    Cash and Equivalents    $16,446Accounts Receivable…

XYZ has determined that market dynamics will result in some annual variations in the numbers they had previously estimated. Deeper market research has revealed that the cost of acquiring a customer is estimated to be $2,000. Also, estimates over five years for the remaining customers at the end of each year with average revenues and cost for each customer are presented in the following table. Considering a discount rate of 15%, calculate the net CLV for XYZ. Discount rate = 15% Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Number of Customers 200 150 120 90 72 54 Revenue Per Customer 5,000 5,000 5,500 5,500 6,000 Variable Cost Per Customer 2,000 2,000 1,800 1,800 1,500

A product has sales of $7M this year, but sales are expected to decline at 10% per year until it is discontinued after year 5. If the firm’s interest rate is 15%, calculate the PW of the revenues.

Net revenues at an older manufacturing plant will be $2 million for this year. The net revenue will decrease 15% per year for 5 years, when the assembly plant will be closed (at the end of Year 6). If the firm’s interest rate is 10%, calculate the PW of the revenue stream.

​Jim's Espresso expects sales to grow by 10.4% next year. Assume that​ Jim's pays out 85.9% of its net income. Use the following statements LOADING... and the percent of sales method to​ forecast: a.​ Stockholders' equity b. Accounts payable   The Tax Cuts and Jobs Act of 2017 temporarily allows​ 100% bonus depreciation​ (effectively expensing capital​ expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career.   Income Statement    Sales    $205,430Costs Except Depreciation    (99,920)EBITDA    $105,510Depreciation    (6,070)EBIT    $99,440Interest Expense (net)    (570)Pretax Income    $98,870Income Tax    (34,605)Net Income    $64,265   Balance Sheet    Assets    Cash and Equivalents    $14,920Accounts Receivable    2,010Inventories    3,950Total Current Assets    $20,880Property, Plant and Equipment    10,070Total Assets    $30,950    Liabilities…

Company A carries out its sales with a net maturity of 45 days, and is considering increasing this maturity to 75 days due to the slowdown in the economy. The company's current annual sales are 6,500. The Company believes that the maturity extension will increase sales by 12%. The gross profit margin of the business is 17% and the market interest rate is 25%. (Year 360 days)1) What is the additional income that will provide the maturity extension?a) 256.9b) 132.6c) 542.7d) 10.2f) 425.5 2) What is the additional cost of the maturity extension to the company?;a) 176.04b) 56.70c) 102.25d) 102.25f) 15.60 3) Should the business extend the maturity or not?

Suppose that you expect a ceteris paribus decrease in average incomes of 10% this year compared to last year. How many aircrafts do you estimate that your company will sell this year? How will it impact total revenues?

The Frozen North Construction Company would like to forecast its minimum volume of work (turnover) in order to “break even” (i.e., cover its corporate overheads) for the coming year. The company’s previous year’s corporate overheads were $900,000. The company anticipates 22% inflation and 6% growth in the firm for the coming year. It also expects to achieve a gross margin of 13% on its projects, based on old experience. The company defines gross margin as a percentage of revenue (i.e., selling price). Determine the minimum volume of work, which will allow the Frozen North Company to break even at the end of the coming year.

Roland Company has a new management team that has developed an operating plan to improve upon last year’s ROE. The new plan would place the debt ratio at 55%, which will result in interest charges of 7,000 per year. EBIT is projected to be 25,000 on sales of 270,000, it expects to have a total asset turnover ration of 3.0, and the average tax rate will be 40%. What does Roland Company expect its return on equity (ROE) to be following the changes?