Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 27, Problem 4P
Quarterly working capital levels for your firm for the next year are included in the following table. What are the permanent working capital needs of your company? What are the temporary needs?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please select the option that best analyzes the WORKING CAPITAL for our example company.
The working capital represents the amount of current assets available to settle our current liabilities. Our example company will definitely be able to pay their current liabilities as they come due.
The working capital represents the amount of current assets available to settle our current liabilities. The current liabilities are not due for more than two years so our current asset amounts are inconsequential.
The working capital represents the amount of current assets available to settle our current liabilities. Our example company will be unable to pay their current liabilities as they come due.
The working capital represents the amount of current assets available to settle our current liabilities. We cannot determine if our example company will be able to pay their current liabilities as they come due.
Assuming you are facing with making a decision on a large capital investment proposal. the capital investment amount is $________,Estimated the study period is _____years .The annual revenue at the end of each year is $_______, and the estimated annual year-end expense is $______starting in year _____, Assuming a market value at the end year is $ ______, and the benchmark rate is 10%, please answer the following questions:
1.Please design this investment project to fill the proper number in blank space to let the project is feasible in economics
What is the average unit cost of the total investment as of December 31, 2020? *
Chapter 27 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 27.1 - Prob. 1CCCh. 27.1 - What is the effect of seasonalities on short-term...Ch. 27.2 - Prob. 1CCCh. 27.2 - What is the difference between temporary and...Ch. 27.3 - Prob. 1CCCh. 27.3 - Describe common loan stipulations and fees.Ch. 27.4 - What is commercial paper?Ch. 27.4 - How is interest paid on commercial paper?Ch. 27.5 - Prob. 1CCCh. 27.5 - What is the difference between a floating lien and...
Ch. 27 - Prob. 1PCh. 27 - Sailboats Etc. is a retail company specializing in...Ch. 27 - What is the difference between permanent working...Ch. 27 - Quarterly working capital levels for your firm for...Ch. 27 - Prob. 5PCh. 27 - Prob. 6PCh. 27 - Prob. 7PCh. 27 - Prob. 8PCh. 27 - Which of the following one-year 1000 bank loans...Ch. 27 - The Needy Corporation borrowed 10,000 from Bank...Ch. 27 - Prob. 11PCh. 27 - Prob. 12PCh. 27 - Prob. 13PCh. 27 - The Signet Corporation has issued four-month...Ch. 27 - Prob. 15PCh. 27 - Prob. 16PCh. 27 - Prob. 17PCh. 27 - Prob. 18P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- The following historical information is from Assisi Community Markets. Calculate the working capital and current ratio for each year. What observations do you make, and what actions might the owner consider taking?arrow_forwardSuppose a firm estimates its overall cost of capital for the coming year to be 10%. What might be reasonable costs of capital for average-risk, high-risk, and low-risk projects?arrow_forwardEstimate the required net operating working capital (NOWC) for each year and the cash flow due to changes in NOWC.arrow_forward
- A. Assume that you have completed your plans and proformas for the next year of operations. The upcoming year looks promising. What would you most likely do from the following list? a. From your proformas project your company’s weighted average cost of capital and return on assets, and compare the two b. Take a vacation because you have been working so hard c. Purchase a new house for your personal use because the future is looking so good d. Make sure that your company’s weighted average cost of capital exceeds your company’s return on assets, if not, rework your plans and proformas B. Assume that all sales are on account. If the average accounts receivable balance was $1,000,000 and accounts receivable turnover was 12 for the last year of operations, what was sales revenue? a. $10,000,000 b. $15,000,000 c. $12,000,000 d. $6,000,000arrow_forwardYou have been depositing money into an account yearly based on the following investment amounts, rates and times, what is the value of that investment account at the end of that period?arrow_forwardChoose an industry and identify the factors that will determine its performance in the next three years. What is your forecast for performance in that time period?arrow_forward
- Compute the Payback Period, Discounted Payback Period, Net Present Value, Internal Rate of Return, and Productivity Index of all four alternatives based on cash flow. use 10 percent for the cost of capital in the calculations. For the Payback Period and for the Discounted Payback Period, compute to the midyear points. ALL Information is in the PNGs!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!arrow_forwardTowson Industries is considering an investment of $496,800 that is expected to generate returns of $150,000 per year for each of the next four years. What is the investment’s internal rate of return? https://openstax.org/books/principles-managerial-accounting/pages/time-value-of-money _________%arrow_forwardWhat is the rate of return on an investment of $10,606 if the company will receive $2,000 each year for the next 10 years? Please show work.arrow_forward
- In your internship with Lewis, Lee, & Taylor Inc. you have been asked to forecast the firm's additional funds needed (AFN) for next year. The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? In your internship with Lewis, Lee, & Taylor Inc. you have been asked to forecast the firm's additional funds needed (AFN) for next year. The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Last year's sales = So S200,000 Last year's accounts payable $50,000 Sales growth rate =9 40% Last year's notes payable S15,000 Last year's total assets = AO S165,000 Last year's accruals $20,000 Last year's profit margin = PM 20.0% Target payout ratio 25.0% Select the correct answer. a - $4,090 b. - $4,060 C. - $3,940 d. - $4,030 e. - $4,000arrow_forwardThe firm`s manager targets to increase the current ratio in the year (2022) by 20% out of the previous year (2021), 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 (20%) at (2022)?arrow_forwardReferring to the following data of the Omani Company, answer A and B: (Note; Write all related Equations regarding the questions) 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 (Suppose the other things are fixe) 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 (Thousand OMR)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Capital Budgeting Introduction & Calculations Step-by-Step -PV, FV, NPV, IRR, Payback, Simple R of R; Author: Accounting Step by Step;https://www.youtube.com/watch?v=hyBw-NnAkHY;License: Standard Youtube License