It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply. Select : 3 The total investment for Chester will be $14,971,498 Total liabilities will be $130,690,535 Chester’s long-term debt will rise by $10,000,000 Working capital will remain the same at $15,118,172 Total Assets will rise to $210,491,502
It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply. Select : 3 The total investment for Chester will be $14,971,498 Total liabilities will be $130,690,535 Chester’s long-term debt will rise by $10,000,000 Working capital will remain the same at $15,118,172 Total Assets will rise to $210,491,502
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
Related questions
Question
It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
Select : 3
-
The total investment for Chester will be $14,971,498
-
Total liabilities will be $130,690,535
-
Chester’s long-term debt will rise by $10,000,000
-
Working capital will remain the same at $15,118,172
-
Total Assets will rise to $210,491,502
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