Reference no: EM13769381
Working Capital and Current Assets
Boeing Aircraft LLP, a manufacturer of rubber-band powered drones, forecasts total fund requirements for the next calendar year as follows:
January $1 million July $6 million
February $1 million August $7 million
March $1 million September $4.5 million
April $2 million October $2.5 million
May $3 million November $2 million
June $4.5 million December $1.5 million
A. What is the permanent component of the monthly funds requirement, and its monthly average
B. What is the seasonal component of the monthly funds requirement, and its monthly average.
C. What would the amounts of long- and short-term financing be to meet total funds requirements under (1) an aggressive funding strategy and (2) a conservative funding strategy.
D. If short-term funds cost 3% annually, and long-term funds cost 6% annually, use these averages to calculate the total cost of each of the strategies shown in (b). Assume firms can earn 2% on any excess cash balance.
E. What is the profitability-risk tradeoffs associated with an aggressive vs. conservative total funding strategy?
|
Operating leverage at the accounting break-even point
: We are evaluating a project that costs $573,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $46, varia..
|
|
Trade and fiscal policy
: Discuss the following.With perfect capital mobility and floating exchange rates, fiscal policy is more ef-fective if the country is more open because of the effect of imported goods on the LM curve.
|
|
Influence risk levels in international business
: List 3 of the Primary factors that influence risk levels in international business but not typically in domestic business.
|
|
Explain what value chain means and apply the term
: Explain what value chain means and apply the term to an offshoring activity that you would likely implement for your company that you work for or for a company that you might create, including three countries of your choice.
|
|
Working capital and current assets
: Boeing Aircraft LLP, a manufacturer of rubber-band powered drones, forecasts total fund requirements for the next calendar year as follows: What is the permanent component of the monthly funds requirement, and its monthly average. What is the seasona..
|
|
Explain the signalling theory of capital structure
: Surf Rider Inc. has 5,000 bonds outstanding with a 6% annual coupon rate, 10 years to maturity, a $1,000 face value, and a market quote of 220%. The company’s 50,000 shares of preferred stock pay a $6 annual dividend, and sell for $120 per share. The..
|
|
Edmonds-karp algorithm for finding the maximum flow
: 1. Edmonds-Karp algorithm for finding the maximum flow of O (NM 2 ) 2. Method push predpotoka finding maximum flow of O (N 4 ) 3. Modified method for pushing predpotoka O (N 3 ) 4. Feed restrictions 5. The flow of minimal cost (min-cost-flow). Algori..
|
|
Using the labor costs shown in the income statements
: A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made production improvements. Assume that Baldwin had a productivity index of 112% and that Chester had a productivity index of 103%.
|
|
What is cost of equity using capm
: Suppose our company has a beta of 1.5. The market risk premium is expected to be 9%, and the current risk-free rate is 6%. What is cost of equity using CAPM?
|