Change in net working capital calculation Samuels Manufacturing is considering the purchase of a new machine to replace one it believes is obsolete. The firm has total current assets of $926,000 and totalcurrent liabilities of $632,000. As a result of the proposed replacement, the following changes are anticipated in the levels of the current asset and current liability accounts noted.Change+ $39,000AccountAccrualsMarketable securitiesInventoriesAccounts payableNotes payable- 13,000+93,000Accounts receivable+ 153,000Cash+ 15,000a. Using the information given, calculate any change in net working capital that is expected to result from the proposed replacement action.a. The change in net working capital is $. (Round to the nearest dollar.)

Current Assets= $926,000 Current liabilities= $632,000 Net working capital= $294,000 Increased in…

Answered: Change in net working capital…

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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Present value index Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids $277,680 (267,000) $10,680 Total present value of net cash flow Amount to be invested Net present value a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Total present value of net cash flow Amount to be invested Present value index $302,100 (318,000) $(15,900) I Des Moines b. Which location does your analysis support? (If both present value indexes are the same, either location will grade as correct.) 1. Cedar Rapids because the net present value index is
Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $158,800 of equipment, having a four-year useful life: Net Income Net Cash FlowYear 1 $44,000 $75,000 Year 2 27,000 58,000 Year 3 13,000 44,000 Year 4 (1,000) 29,000 Present Value of $1 at Compound InterestYear 6% 10% 12% 15% 20%1 0.943 0.909 0.893 0.870 0.8332 0.890 0.826 0.797 0.756 0.6943 0.840 0.751 0.712 0.658 0.5794 0.792 0.683 0.636 0.572 0.4825 0.747 0.621 0.567 0.497 0.4026 0.705 0.564 0.507 0.432 0.3357 0.665 0.513 0.452 0.376 0.2798 0.627 0.467 0.404 0.327 0.2339 0.592 0.424 0.361 0.284 0.19410 0.558 0.386 0.322 0.247 0.162 a. Assuming that the desired rate of return is 10%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. Present value of net cash flow $fill in the blank 1Amount to be invested $fill in the blank 2Net present value $fill in the blank 3b. Would…
ine capital asset pricing model to find the rcquired retim on this investment Q3: Company currently has total assets of $4 million, of which current assets comprise $0.5 million. Sales are $9 million annually, and the before-tax net profit margin (the firm currently has no interest-bearing debt) is 13 percent. Current assets levels of $0.5 million and $0.7 million are being considered instead of the $0.5 million presently held. Any additions to current assets would be financed with new equity capital. a. Determine the total asset turnover, before-tax return on investment, and before-tax net profit margin under the three alternative levels of current assets. b. If the new additions to current assets were financed with long-term debt at 14 percent interest, what would be the before-tax interest "cost" of the two new policies?
Capital Investment Analysis: Geddes Company
Projected Operating Assets Berman & Jaccor Corporation's current sales and partial balance sheet are shown below. Sales Balance Sheet: Assets Cash Short-term investments Accounts receivable Inventories Total current assets Net fixed assets Total assets This year $1,000 $ 200 $ 90 $ 300 $300 $ 890 $ 450 $1,340 Sales are expected to grow by 12% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets? Do not round intermediate calculations. Round your answer to the nearest dollar.
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Shamrock Company has decided to expand its operations. The bookkeeper recently completed the following balance sheet in order to obtain additional funds for expansion. SHAMROCK COMPANY BALANCE SHEET FOR THE YEAR ENDED 2020 Current assets Cash $236,500 Accounts receivable (net) 346,500 Inventory (lower-of-average-cost-or-market) 407,500 Equity investments (marketable)-at cost (fair value $126,500) 146,500 Property, plant, and equipment Buildings (net) 576,500 Equipment (net) 166,500 Land held for future use 181.500 Intangible assets Goodwill 86,500 Cash surrender value of life insurance 96,500 Prepaid expenses 18,500 Current liabilities Accounts payable 141.500 Notes payable (due next year) 131,500 Pension obligation 88,500 Rent payable 55,500 Premium on bonds payable 59,500 Long-term liabilities Bonds payable 506,500 Stockholders' equity Common stock, $1.0 par, authorized 400,000 shares, issued 296,500 296,500 Additional paid-in capital 166,500 Retained earnings Prepare a revised…
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Question Content Area What type of analysis is indicated by the following? Increase (Decrease) Current Year Preceding Year Amount Percent Current assets $430,000 $500,000 $(70,000) (14%) Fixed assets 1,740,000 1,500,000 240,000 16 a.vertical analysis b.liquidity analysis c.horizontal analysis d.common-size analysis
Explain liquidity risk and how it can affect financial institutions, and discuss the framework used to help manage this risk to mitigate against liquidity exposure for these institutions.

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