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Internal growth rate and sustainable growth rate

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Reference no: EM131537425

a. Money Gra Inc has a profit Margin of 11% and a retention ratio of 70%. Last year, the firm has sales of $500 and total assets of $1000.

What is the Internal Growth Rate and Sustainable Growth Rate? Show all calculations in details

b. Which decisions rules has the advantage that the information needed for calculation is readily available?

c. You have $500 in an account which pays 5% compound interest. How many additional dollars of interest would you earn over 4 years if you moved the money to an account earning 6%?

d. You are purchasing a house valued at $350,000. You will make a 5% down payment on the house. You have negotiated the following terms for your mortgages.

Terms:- 15 years, Interest Rate :- 7.5% APR Compounded monthly ,Payment Period: Monthly, at the beginning of each month. How much is your monthly mortgage payment?

e. Rolex Inc., a manufacturer of reproduction parts for classic automobiles , needs to raise $2million via a right offering. The subscription price is $ 2 per share. The firm currently has 2 million shares outstanding, and the current market price per share is $6.What is the ex- rights price of the firm's stock?

f. A firm has fixed costs of $30,000 per year, depreciation of $10,000 per year, a price per unit of $30, and an accounting break-even point of 2,000 units.

What are the firm's total variable costs at the accounting break-even point?

Reference no: EM131537425

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