Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Suppose that Linksys is considering the development of a wireless home networking appliance, called HomeNet, that will provide both the hardware and the software necessary to run an entire home from any
Internet connection. Linksys's receivables are 14.5% of sales and its payables are 14.1% of COGS. Forecast the required investment in net working capital for HomeNet assuming that sales and cost of goods
sold (COGS) will be as follows:
Year
Sales
COGS
0
1
$23,651
$9,561
2
$26,513
$10,718
The required investment in net working capital for year 0 is $0. (Round to the nearest dollar.)
The required investment in net working capital for year 1 is $. (Round to the nearest dollar.)
3
$23,503
$9,501
4
$8,465
$3,422
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Transcribed Image Text:Suppose that Linksys is considering the development of a wireless home networking appliance, called HomeNet, that will provide both the hardware and the software necessary to run an entire home from any Internet connection. Linksys's receivables are 14.5% of sales and its payables are 14.1% of COGS. Forecast the required investment in net working capital for HomeNet assuming that sales and cost of goods sold (COGS) will be as follows: Year Sales COGS 0 1 $23,651 $9,561 2 $26,513 $10,718 The required investment in net working capital for year 0 is $0. (Round to the nearest dollar.) The required investment in net working capital for year 1 is $. (Round to the nearest dollar.) 3 $23,503 $9,501 4 $8,465 $3,422
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