A major factor in this theory is that students can select the most appropriate typeof finance and justify. This makes the plenary activity important and this couldtake up another lesson quite easily.Scenario 1A new start-up printing business has doubled in size in the first 12 months oftrading and needs new premises that will cost £800,000.What source of finance could be used? Why?

solution: answer The new start up printing business has doubled in size in the first 12 months of…

Answered: of finance and justify. This makes the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Persimmon, Inc. is considering a 3 year project. Your boss said to you “We owe these consultants $1.2 million for this report. Before we spend $15 million on new equipment needed for this project, look it over and give me your opinion.” Here are the report’s estimates (in millions of dollars): [BE SURE TO SCROLL DOWN TO SEE THE ENTIRE QUESTION.] 1 2 3 Sales revenue 25.0 25.0 25.0 - Cost of…
Your sister is thinking about starting a new business. The company would require $300,000 of assets, and it would be financed entirely with common stock. She will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business? a. $44,145 b. $38,475 c. $33,210 d. $40,500 e. $41,310
Please can you provide your answers step by step and your logical thought process when answering? Thanks!
5. Jeff's Stereo Sound is expanding its product offerings to reach a wider range of customers. The expansion project includes increasing the floor inventory by $150,000 and increasing its debt to suppliers by 50% of that amount. The company will also spend $200,000 for a building contractor to expand the size of the showroom. As part of the expansion plan, the company will be offering credit to its customers and thus expects accounts receivable to rise by $25,000. For the project analysis, what amount should be used as the initial cash flow for net working capital? A. $75,000 B. $100,000 C. $125,000 D. $150,000 E. $175,000
Give correct solution
a)A retailer is considering opening a new store as a business venture. The purchase price of the store will be £2 million and there will be a further investment required of £0.5 million 6 months after purchase.The store will open 12 months after purchase. Revenues less running costs are expected to occur continuously and will be £0.2 million in the first year of operation, £0.25 million in the second year of operation and thereafter increasing at yearly intervals by 4% per annum compound.Eight years after purchase, a major refit costing £0.8 million will be required. Fifteen years after purchase, it is assumed that the store will be closed and sold for £6.4million.The retailer requires a rate of return on its investment of 10% per annum effective.i)Calculate the net present value of the venture. It is now assumed that the revenue less running costs will be received mid-way through each year, rather than continuously.ii)Explain how your answer to part (i) would change. b)A loan is to be…

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of finance and justify. This makes the plenary activity important and this could take up another lesson quite easily. Scenario 1 A new start-up printing business has doubled in size in the first 12 months of trading and needs new premises that will cost £800,000.