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Additional Funds Needed The Booth Company's sales are forecasted to double from $1,000 in 2012 to $2,000 in 2013. Here is the December 31, 2012, balance sheet: Cash $ 100 Accounts payable $ 50 Accounts receivable 200 Notes payable 150 Inventories 200 Accruals 50 Net fixed assets 500 Long-term debt 400 Common stock 100 Retained earnings 250 Total assets $1000 Total liabilities and equity $1000 Booth's fixed assets were used to only 50% of capacity during 2012, but its current assets were at their proper levels in relation to sales. Spontaneous liabilities and all assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 6% and its payout ratio to be 35%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.
The operating cost of a new machine is $500 for the first year. Starting the second year, the operating cost increases by $200 per year for the next 10 years. Calculate the equivalent annual operating cost of the machine. What will be the present and..
Flatte Restaurant is considering the purchase of a $11,000 soufflé maker. The soufflé maker has an economic life of four years and will be fully depreciated by the straight-line method. The machine will produce 2,500 soufflés per year, with each cost..
The Total assessed property value in River city is $106,000,000. budget planners have determined that $7,663,800 will be required to provide all government services next year. What tax rate is required to meet the budgetary demands?
Determine the maximum price he or she should be willing to pay to purchase Honeywell call options having an exercise price of $45 and expiring in 156 days.
You own 1,000 shares of stock in Avondale Corporation. You will receive a $0.80 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $35 per share. The required return on Avondale stock is 16 percent. You only wan..
Why do you think mutual funds are such popular investment vehicles? Why doesn’t management simply diversify its operations? Isn’t that what management is supposed to do?
You establish a straddle on Walmart using September call and put options with a strike price of $50. The call premium is $4.25 and the put premium is $5 A) Draw the profit and loss diagram for this strategy as a function of the stock price at expirat..
If you were too choose only one of the stocks, either PFE or AAPL, which stock would you select? Explain your choice. Which combination of PFE and AAPL (approximately) represents the “minimum variance portfolio”? Explain why we can eliminate risk by ..
In a shipping and packing equipment acquisition proposal, Fleeing Stars Enterprise has worked out a deal on the interest rate with the vendor, Outahere Shipping. The equipment is being financed for 10 years with monthly payments.
What is the total market value of the firm? What are the capital structure weights?
Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 17 years, have a face value of $1,000, and a yield to maturity of 11%. What is the price of the bonds? A Treasury bond that matures in 10 years has..
"Steve, who is single, has $100,000 of salary, $10,000 of income from a limited partnership, and a $25,000 passive loss from a real estate rental activity in which he actively participates. His modified adjusted gross income is $100,000. Of the $25,0..
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