Reference no: EM131047591
Problem 12-4 Sales Increase Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $2,800,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and $200,000 of accruals. Looking ahead to 2014, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 5%, and its payout ratio will be 45%. How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self-supporting growth rate? Do not round intermediate steps. Round your answers to the nearest whole. Sales can increase by $ , that is by %.
|
Price of the bond using both duration and convexity
: Calculate the duration and convexity of a 4-year, 4 percent coupon bond with a face value of $1000. Assume that the yield on this bond is 5 percent. If the interest rates decrease 10 basis points, what would be the approximate change in the price of ..
|
|
Price of the bond using duration approximation
: Calculate the duration of a 4-year, 4 percent coupon bond with a face value of $1000. Assume that the yield on this bond is 5 percent. If the interest rates decrease 10 basis points, what would be the approximate change in the price of the bond usin..
|
|
How can the manager immunize the obligation
: An insurance company must make a payment of $5,788.125 in 3 years and another $12,762.82 in 5 years. The market interest rate is 5 %. The company’s portfolio manager wishes to fund the obligation using 2-year zero-coupon bonds and perpetuities paying..
|
|
The travel costs can melissa deduct as business expenses
: Melissa recently paid $400 for round-trip airfare to San Francisco to attend a business conference for three days. Melissa also paid the following expenses: $250 fee to register for the conference, $300 per night for three night’s lodging, $200 for m..
|
|
What is its self-supporting growth rate
: Sales Increase Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $2,800,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of account..
|
|
Capital expenses-debt and debt principal payments
: Cummings has EAT, depreciation expense, capital expenses, debt and debt principal payments of $9m, $2.8m, $1.3m, $40m and $1.5m respectively. Cummings plows about 30% of its profits back into its business. Derive the value of Cummings, if the growth ..
|
|
What is the current stock price
: A call option is currently selling for $6.40. It has a strike price of $55 and six months to maturity. A put option with the same strike price sells for $7.40. The risk-free rate is 5.3 percent, and the stock will pay a dividend of $2.70 in three mon..
|
|
Call option is currently selling
: A call option is currently selling for $6.40. It has a strike price of $55 and six months to maturity. A put option with the same strike price sells for $7.40. The risk-free rate is 5.3 percent, and the stock will pay a dividend of $2.70 in three mon..
|
|
Begin by constructing a time line
: NPV A project has an initial cost of $53,725, expected net cash inflows of $13,000 per year for 10 years, and a cost of capital of 12%. What is the project's NPV? (Hint: Begin by constructing a time line.) Do not round your intermediate calculations...
|