PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Chapter 29, Problem 4PS
Sources and uses of cash and working capital* Listed below are six transactions that Dynamic Mattress might make. Indicate how each transaction would affect (1) cash and (2) working capital. The transactions are
- a. Pay out an extra $10 million cash dividend.
- b. Receive $2,500 from a customer who pays a bill resulting from a previous sale.
- c. Pay $50,000 previously owed to one of its suppliers.
- d. Borrow $10 million long term and invest the proceeds in inventory.
- e. Borrow $10 million short term and invest the proceeds in inventory.
- f. Sell $5 million of marketable securities for cash.
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Calculate a firm’s free cash flow (“FCF”) from the Statement of Cash Flows if Net income is $60,000, depreciation expense is $10,000, working capital investment (a use of cash) is $20,000, Cash Flow From Operations is $50,000 and net Capital Expenditures (a use of cash) are $40,000.
Which of the following is an example of
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B
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1
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(Click on the icon in order to copy its contents into a spreadsheet.)
What is the present value of each of these three investments if the appropriate discount rate is
14 percent?
Question content area bottom
Part 1
a. What is the present value of investment A at an annual discount rate of
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$
enter your response here
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Chapter 29 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 29 - Sources and uses of cash State whether each of the...Ch. 29 - Sources and uses of cash Table 29. 11 shows...Ch. 29 - Prob. 3PSCh. 29 - Sources and uses of cash and working capital...Ch. 29 - Prob. 5PSCh. 29 - Prob. 6PSCh. 29 - Cash cycle A firm is considering several policy...Ch. 29 - Collections on receivables Here is a forecast of...Ch. 29 - Collections on receivables If a firm pays its...Ch. 29 - Forecasts of payables Dynamic Futon forecasts the...
Ch. 29 - Cash budget Table 29.13 lists data from the budget...Ch. 29 - Short-term financial plans a. Paymore places...Ch. 29 - Short-term financial plans Which items in Table...Ch. 29 - Short-term financial plans Work out a short-term...Ch. 29 - Prob. 16PSCh. 29 - Prob. 17PSCh. 29 - Long-term financial plans Corporate financial...Ch. 29 - Prob. 19PSCh. 29 - Prob. 20PSCh. 29 - Long-term financial plans Construct a new model...Ch. 29 - Long-term financial plans a. Use the Dynamic...Ch. 29 - Long-term financial plans Table 29.15 summarizes...Ch. 29 - Long-term financial plans Abbreviated financial...Ch. 29 - Prob. 25PSCh. 29 - Forecast growth rate What is the maximum possible...Ch. 29 - Forecast growth rate a. What is the internal...Ch. 29 - Forecast growth rate Bio-Plasma Corp. is growing...Ch. 29 - Long-term plans Table 29.18 shows the 2019...
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