Compute the permanent financing requirement

Assignment Help Finance Basics
Reference no: EM133067923

A firm that is in the process of preparing its financial plan for the upcoming year has estimated the following current assets (in P000,000) for the year.

Month

CA

Month

CA

Month

CA

Jan

19.2

May 

36.6

Sept

26.9

Feb

21.6

June

43.8

Oct

25.5

Mar

24.5

Jul

40.5

Nov

23.4

Apr

33.4

Aug

34.4

Dec

20.7

The firm's fixed assets should remain constant at P40 million. Owner's equity is forecast to be P25 million. Working capital policy requires that 50% of maximum current assets financed be with permanent financing.

  1. How much will the firm's permanent level of assets be for the coming year? 
  2. Compute the permanent financing requirement of the firm.
  3. Compute the maximum temporary financing requirement of the firm.

Reference no: EM133067923

Questions Cloud

What is the annual payment amount : Question - A company plans on taking out real estate loan of $10 Million on its distribution center. What is the annual payment amount
How the financial statements are prepared : Name three similarities and three differences between how the financial statements are prepared for public colleges vs. private ones.
What awards do they provide : What awards do they provide? Usually these will fall into various categories by types of diversity, profession or industry and What is the criteria
Exploring the weighted average cost of capital : When exploring the Weighted Average Cost of Capital (WACC) we were introduced to the fundamental components that firms use to estimate their hurdle rate.
Compute the permanent financing requirement : A firm that is in the process of preparing its financial plan for the upcoming year has estimated the following current assets (in P000,000) for the year.
What the total paid-in capital related to the common stock : Presented below is information related to Hale Corporation: What the total paid-in capital (cash collected) related to the common stock
What difficulties do they have with language : Identify someone you know from whose national culture is different to yours - this could be another student, someone you work with or a friend
Enhancing cyber security in healthcare : Enhancing Cyber Security In Healthcare -With The Help Of Machine Learning
Current price per share for kirksville : Kirksville Ice Cream Co. just paid a dividend of $6.50 per share. The company will increase its dividend by 20% next year and then will reduce this dividend gro

Reviews

Write a Review

Finance Basics Questions & Answers

  How much will it cost you to buy a seat

Assume that Schenkel uses cumulative voting, and there are four seats in the current election. How much will it cost you to buy a seat?

  Determine whether or not changes in the cost of capital

Determine whether or not changes in the cost of capital could ever cause a change in the internal rate of return (IRR) ranking of two.

  How much annual mileage must a salesman travel by car

A company is currently paying a sales representative $0.25 per mile to drive her car for company business. The company is considering supplying.

  What are the different levels of compensation and benefits

What are the different levels of compensation and benefits? Describe each level and giveexamples were necessary.

  What is the required rate of return on a preferred stock

What is the required rate of return on a preferred stock with a $50 par value, a stated dividend of 10% of par, and a current market price of (a) $54, (b) $89, (c) $101, and (d) $132 (assume the market is in equilibrium with the required return eq..

  Calculate the actual portfolio return

Portfolio return and standard deviation Jamie Wong is thinking of hu i lding an investment portfolio containing two stock

  What is the desirable period combination and why

What is the desirable period combination (days) and why? Note- there is no absolute right or wrong choice, we are testing your ability to apply the principles.

  What is the rancher’s option price for the county program

What is the rancher's option price for the county program? (Set up the appropriate equation and solve through iterative guessing.)

  What is the yield to maturity of bond

A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par value. The bond has a coupon rate of 5.2 percent paid annually and matur

  Evidence in another crime

How can deleting emails become a crime alone if it is considered evidence in another crime?

  How does systemic risk differ from systematic risk

What is systemic risk? How does systemic risk differ from systematic risk? Why may one claim that when AIG was engaged in the CDS

  Private placement to raise the necessary funds

You wish to value the shares of Sunwolves Pty Ltd, which is currently unlisted. The company is considering becoming listed

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd