Hodgkiss Mig, Inc, is currently operating at only 92 percent of fixed asset capacityCurrent sales are $780,000. Fixed assets are $470,000 and sales are projected to growto $880,000. How much in new foxed assets are required to support this growth in sales?Assume the company wants to operate at full capacity (Do not round intermediatecelculetions and round your answer to 2 decimal places,e.g.. 32.16)O Answer is complete but not entirely correct.New fxed assets487 B72000

Step1: Calculating the value of full capacity sales. We have,Full capacity sales = Current Sales /…

Answered: Hodgkiss Mig, Inc, is currently…

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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The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $200,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $60 and variable costs at 80% of revenue. The company's policy is to pay out two- thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019 (Figures in $ thousands) Revenue $1,800 Fixed costs Variable costs (80% of revenue) Depreciation Interest (8% of beginning-of-year debt) Taxable income Taxes (at 40%) 60 1,440 80 24 196 78 Net income 118 Dividends Addition to retained earnings $ 79 $ 39 BALANCE SHEET, YEAR-END (Figures in $ thousands) 2019 Assets Net working capital Fixed assets…
The firm is contemplating the following (base case): Vehicle acquisition cost $ 48,000 Years of useful life (economic life) 1 Tax rate 25% Required rate of return on equity 11% Required return on debt 6% Debt ratio 40% Annual revenues $ 175,000 Operating expenses (excluding depreciation) $ 115,000 1.Depreciate straight-line over the year of useful life, down to $0 over one year. The maximum dividend is paid at year end. Ignore any working capital effects. Capital charge will be based on the assets at the beginning of each year. What is the WACC?
The Carioco Company has two divisions that operate independently of one another. The financial data for the year 2022 reported the following results: Alpha Beta Sales $3,000,000 $2,500,000 Operating income 750,000 550,000 Taxable income 650,000 375,000 Investment 6,000,000 5,000,000 The company's desired rate of return is 10%. Income is defined as operating income. Required: What are the respective return-on-investment ratios for the Alpha and Beta Divisions? a. 0.110 and 0.125 b. 0.125 and 0.110 c. 0.050 and 0.150 d. 0.108 and 0.075
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $350,000 per year for the next 4 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 20% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $86 and variable costs at 70% of revenue. The company’s policy is to pay out one-half of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 2,160 Fixed costs 86 Variable costs (70% of revenue) 1,512 Depreciation 280 Interest (6% of beginning-of-year debt) 18 Taxable income 264 Taxes (at 35%) 92 Net income $ 172 Dividends $ 86 Addition to retained…
What is the margin, turnover and ROI if the existing company performs the same next year AND it adds the proposed investment? Paul company has the following data for its most recent year end: Sales $1,400,000 Variable Expenses $756,000 Contribution Margin $644,000 Fixed Expenses $410,000 NOI $234,000 AIso Paul is considering an investment in new equipment that willcost $250,000. The new equipment is projected to produce saIes of$420,000 and have variabIe costs of 60% of sales and fixed costs of$114,000.
Please provide the correct answer
Last year National Aeronautics had a FA/Sales ratio of 40%, comprised of $250 million of sales and $100 million of fixed assets. However, its fixed assets were used at only 75% of capacity. Now the company is developing its financial forecast for the coming year. As part of that process, the company wants to set its target Fixed Assets/Sales ratio at the level it would have had had it been operating at full capacity. What target FA/Sales ratio should the company set? A) 28.5% B 30.0% C) 31.5% D) 33.1% E 34.7%
Assume that the current ratio for Arch Company is 3.5, its acid-test ratio is 2.0, and its working capital is $360,000. Answer each of the following questions independently, always referring to the original information. Required: If the firm pays an account payable of $53,000, what will its new current ratio and working capital be? Note: Do not round intermediate calculations. Round "Current ratio" to 1 decimal place. If the firm sells inventory that was purchased for $50,000 at a cash price of $64,000, what will its new acid-test ratio be? Note: Do not round intermediate calculations. Round your answer to 1 decimal place.
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A company is planning to purchase a machine that will cost $34,800, will have a six-year life, and will have no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? Sales Costs: Manufacturing Depreciation on machine Selling and administrative expenses Income Multiple Choice O O O 3 5.80% 5.17% 50.00% 17.24%. 33.33%. E $ 105,000 $ 51,200 5,800 45,000 (102,000) $ 3,000 80 F3 a F4 F5 F6 54 85 R D F ןד C V 6 & 7 T Y DII F7 F8 F9 F10 U 8 9 0 0 G H J K L B N M P
Mitchell Manufacturing Company has $1,500,000,000 in sales and $260,000,000 in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar.$ What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. % If Mitchell's sales increase by 50%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar.$

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