Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 4P
Consider the following potential events that might have taken place at Global Conglomerate on December 30, 2015. For each one, indicate which line items in Global’s
- a. Global used $20 million of its available cash to repay $20 million of its long-term debt.
- b. A warehouse fire destroyed $5 million worth of uninsured inventory.
- c. Global used $5 million in cash and $5 million in new long-term debt to purchase a $10 million building.
- d. A large customer owing $3 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.
- e. Global’s engineers discover a new manufacturing process that v/ill cut the cost of its flagship product by over 50%.
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Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity.
a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt.
b. A warehouse fire destroyed $5.2 million worth of uninsured inventory.
c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building.
d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.
e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%.
f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices.
d. A large customer owing $2.8 million for products it already received…
Consider the following potential events that might have taken place at Global Conglomerateon December 30, 2018. For each one, indicate which line items in Global’s balance sheet wouldbe affected and by how much. Also indicate the change to Global’s book value of equity. (In allcases, ignore any tax consequences for simplicity.)a. Global used $20 million of its available cash to repay $20 million of its long-term debt.b. A warehouse fire destroyed $5 million worth of uninsured inventory.c. Global used $5 million in cash and $5 million in new long-term debt to purchase a $10 million building.d. A large customer owing $3 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.e. Global’s engineers discover a new manufacturing process that will cut the cost of its flagshipproduct by over 50%.f. A key competitor announces a radical new pricing policy that will drastically undercutGlobal’s prices.
Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity.
a. Global used $19.2 million of its available cash to repay $19.2 million of its long-term debt.
b. A warehouse fire destroyed $4.7 million worth of uninsured inventory.
c. Global used $4.9 million in cash and $5.4 million in new long-term debt to purchase a $10.3 million building.
d. A large customer owing $3.1 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment.
e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 51%.
f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices.
Global used $19.2 million of its available cash to repay $19.2 million…
Chapter 2 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 2.1 - Prob. 1CCCh. 2.1 - Prob. 2CCCh. 2.2 - Prob. 1CCCh. 2.2 - Prob. 2CCCh. 2.2 - Prob. 3CCCh. 2.3 - What it is the difference between a firms gross...Ch. 2.3 - What is the diluted earnings per share?Ch. 2.4 - Prob. 1CCCh. 2.4 - Prob. 2CCCh. 2.5 - Prob. 1CC
Ch. 2.5 - Prob. 2CCCh. 2.6 - Why is EBITDA used to assess a firms ability to...Ch. 2.6 - Prob. 2CCCh. 2.6 - Prob. 3CCCh. 2.6 - Prob. 4CCCh. 2.7 - Describe the transactions Enron used to increase...Ch. 2.7 - Prob. 2CCCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Consider the following potential events that might...Ch. 2 - What was the change m Global Conglomerates book...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - In early 2012, General Electric (GE) had a book...Ch. 2 - In early-2015, Abercrombie Fitch (ANF) had a book...Ch. 2 - Prob. 10PCh. 2 - Suppose that in 2016, Global launches an...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Suppose a firms tax rate is 35%. a. What effect...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Prob. 22PCh. 2 - Can a firm with positive net income run out of...Ch. 2 - Suppose your firm receives a 5 million order on...Ch. 2 - Nokela Industries purchases a 40 million...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - Prob. 28PCh. 2 - For fiscal year end 2015, Wal-Mart Stores, Inc....Ch. 2 - Prob. 30PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Use the data in Problem 8 to determine the change,...Ch. 2 - You are analyzing the leverage of two firms and...Ch. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Consider a retailing firm with a net profit margin...Ch. 2 - Prob. 44PCh. 2 - Prob. 45P
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