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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

Foundations of Business (MindTap Course List)
Foundations of Business (MindTap Course List)
6th Edition
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Chapter16: Mastering Financial Management
Section: Chapter Questions
Problem 3DQ
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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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