Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash.Consider the case of the Red Hamster Manufacturing Corporation:Search tiRed Hamster Manufacturing Corporation has forecasted sales of $ 30,000,000 for next year and expects its cost of goods sold (COGS) to remain at 80% of sales. Currently, the firm holds $3,100,000 in inventories, $2,300,000 in accounts réceivable, and $2,500,000 in accounts

Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash.Consider the case of the Red Hamster Manufacturing Corporation:Search tiRed Hamster Manufacturing Corporation has forecasted sales of $ 30,000,000 for next year and expects its cost of goods sold (COGS) to remain at 80% of sales. Currently, the firm holds $3,100,000 in inventories, $2,300,000 in accounts réceivable, and $2,500,000 in accounts

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Your consulting firm was recently hired to improve the performance of RP Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis. you want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is the firm's present cash conversion cycle? Average inventory Annual sales Annual cost of goods seld Average accounts receivable Average accunts payable P5.000 P00.000 PH0,000 P0,000 F5000 140.6 days 120.6 days 133.6 days 148.0 days O 126.9 days
Hello. I need help with the following question. The estimation of cash flows Consider the case of Beak’s Birdhouse Builders Inc. (B3): Beak’s Birdhouse Builders Inc. (B3) currently earns annual revenues of $1,500,000 and incurs total operating expenses (excluding depreciation and interest expense) of 45% of revenues. Its earnings are taxed at a rate of 40%. Today, its budgeting committee is evaluating the purchase of a new computerized table saw. The table saw is expected to cost $15,000, plus $3,500 in freight and setup expenses, and will be depreciated using straight-line depreciation. It is expected that the table saw will have a useful life of ten years and a salvage value equal to 25% of its purchase price. It is further expected that the table saw will increase the firm’s productivity and cause a 25.00% increase in the firm’s annual sales and total operating expenses (excluding depreciation and interest expense). If the table saw is purchased, the firm will require an…
You have recently been hired to improve the performance of Multiplex Corporation, which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year,(a) what is your estimate of the firm’s current cash conversion cycle? Current inventory = $241,000.00 • Annual sales = $1,200,000.00 • Accounts receivable = $300,000.00 • Accounts payable = $245,000.00 • Total annual purchases = $600,000.00 • Purchases credit terms: net 30 days. • Receivables credit terms: net 50 days.
Give typing answer with explanation and conclusion
A) Obtain the EFN if the firm plans to have sales growth equal to 20% B) Use your fianncial model to estimate the internal growth rate
i need the answer quickly
please help me
As part of their investment strategy, the Carringtons have decided to put $100,000 into stock market investments and also into purchasing precious metals. The performance of the investments depends on the state of the economy in the next year. In an expanding economy, it is expected that their stock market investment will outperform their investment in precious metals, whereas an economic recession will have precisely the opposite effect. Suppose the following payoff matrix gives the expected percentage increase or decrease in the value of each investment for each state of the economy. Stock market investment Commodity investment Expanding Economic economy recession -10t 10 commodities 15 5 (a) Determine the optimal investment strategy for the Carringtons' investment of $100,000. (Round your answers to the nearest dollar.) stocks $ $ PRACTICE ANOTHER (b) What profit can the Carringtons expect to make on their investments over the year if they use their optimal investment strategy?…
Please give answer for A and B
Your boss, the chief financial officer (CFO) for Dream Analytics Inc., has just handed you the estimated cash flows for two proposed projects. Project A involves adding a new item to the firm’s Digital Intelligence software line. It would take some time to build up the market for this product, so the cash inflows would increase over time. Project B involves an add-on to an existing Global Integration self-guided software line, and its cash flows would decrease over time. Both projects have 4-year lives because Dream Analytics is planning to introduce an entirely new Artificial Intelligence software product at that time. The budget is $25,000 for the initial investment. Here are the estimated net cash flows (in thousands of dollars): Expected Net Cash Flows Year Project A Project B 0 $(25,000) $(25,000) 1 12500 9000 2 9900 23000 3 21000 11000 4 14000 1500 The CFO also made subjective risk assessments of each project, and he concluded that the projects both have risk characteristics that…
Apple’s cash pile had reached $137 billion in December 2012. Major shareholders, such as David Einhorn of Greenlight Capital, began to demand that Apple return some of its cash to its shareholders. Why might Apple have needed to hold on to so much cash in excess of what it needed to operate? Would you have recommended that Apple respond to and satisfy shareholders’ demands by distributing significant amounts of its cash? If so, what method(s) of returning cash would you have recommended, and why
As a firm grows, it must support increases in revenue with new investments in assets. The self-supporting growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). Consider this case: Green Moose Industries has no debt in its capital structure and has $300 million in assets. Its sales revenues last year were $210 million with a net income of $10 million. The company distributed $1.55 million as dividends to its shareholders last year. What is the firm’s self-supporting, growth rate? (Note: Do not round your intermediate calculations.) 2.90% 0.61% 4.00% 0.52% Which of the following are assumptions of the self-supporting growth model? Check all that apply. The firm must issue the same number of new common shares that it issued last year. Common stock is the firm’s only form of equity.…

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