Company expands to other markets with good designs

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1. It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.

Total liabilities will be $146,603,223

Chester’s long-term debt will rise by $9,000,000

Total Assets will rise to $246,118,606

Working capital will remain the same at $18,455,529

The total investment for Chester will be $227,758,262

2. Suppose the Digby company expands to other markets with good designs, high awareness and easy accessibility, what strategy would they be implementing?

Broad differentiation

Niche differentiation

Niche cost leader

Broad cost leader

Reference no: EM131932987

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