the VC is checking your business acumen and says, "If I give you $500,000, and you purchase your additional stores, your total assets will be around a million dollars. What is your current ratio?" Please calculate the current ratio?
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the VC is checking your business acumen and says, "If I give you $500,000, and you purchase your additional stores, your total assets will be around a million dollars. What is your
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- T/F Person A works for Global Payments Inc. They will take a portion of their pay check to buy Global Payments Stock every pay period. This is an example of Gain sharing.Which is an example of a financing decision for a company? O Selling a franchise of a restaurant for $100,000. O Selling $4 million worth of common stock in an IPO. O Buying a $1 million Amazon delivery business. O Selling of all your foreign business assets. 4An investor has the opportunity to invest in four new retail stores. The amount that can be invested in each store, along with the expected cash flow at the end of the first year, the growth rate of the concern, and the cost of capital is shown for each case. It is assumed each investment will operate in perpetuity after the initial investment. Which investment should the investor choose? O A. Initial investment: $100,000; Cash flow in year 1: $12,000; Growth Rate: 1.25%; Cost of Capital: 9% O B. Initial investment: $90,000; Cash flow in year 1: $10,000; Growth Rate: 1.50%; Cost of Capital: 9.2% O C. Initial investment: $80,000; Cash flow in year 1: $8000; Growth Rate: 1.75%; Cost of Capital: 8.1% O D. Initial investment: $60,000; Cash flow in year 1: $6000; Growth Rate: 2.50%; Cost of Capital: 7.2%
- Assume that you started a new business last year with RM30,000 of your own money to purchase equipment. You are seeking a RM100,000 loan to finance the inventory needed to reach this year’s sales target. You have agreed to pledge your venture’s delivery truck and your personal car as a security for the loan. Your family member has agreed to become the guarantor. During your initial year of operation, you paid your supplier in 30-day credit. (a) Assume that at the end of next year you will have an accounts receivable balance of RM15,000 and an inventory balance of RM30,000. If a bank lends an amount equal to 80% of accounts receivable and 50% of inventories pledged as collateral, estimate the amount that the bank might consider for a bank loan a year from now.1. If the Fur Zapper entrepreneurs want $600,000 at 15%, what is the total value of their business? 2. Explain what the "line of credit" is in Lori's offer. 近Create a financial statement for your hypothetical new business venture. Using the attached Excel template, and based on surveying a specific market place, make a best-guess estimated statement exhibiting profit and loss. In business, accuracy counts, so make sure to check and recheck your numbers before submitting your financial statements. Your grade will be based on the completeness and accuracy of the Income Statement. This is all of the information that I have. The hypothetical business is for a residential moving company.
- This is an individual assignment. Everyone needs to work on the firm that your team chooses [prefer simple business] for your industry analysis. Follow my class video, do the following: 1. compute your company's free cash flow for the past 3 years. This requires you to compute each of the components in the FCF. Compare your FCF for the most recent year to that reported from the barchart website. Are you close? Explain why you cannot get close to it. Note for MSFT that I did in class, deferred tax is a big deal, it may not be a problem for you. NOPAT = EBIT - tax. Either find the line for tax, or do tax = EBT-NI. Also check their cash flow statement and that should give you a clue of what to include. 2. do a free cash flow model to value your stock for next year. Is your price close to the current stock price? If not, what could be the reason? 3. do a sensitivity table by varying terminal growth g and the WACC. Upload your excel file with a sheet explaining your results. Always…A group of undergraduates has raised and spent $5 million developing a business thus far. Another $1 million has to be spent to finish the business. Once the business is fully developed, the group could sell the business for $3 million. In considering whether or not proceeding with the business is going to be profitable, which amounts of money are relevant? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b C The $1 million cost to finish the business d The $3 million value of the finished business The $1 million cost to finish the business and the $3 million value of the finished business The $5 million already invested in developing the businessSuppose you are the only owner of a chain of coffee shops near universities. Your current cafés are doing well, but you are interested in starting a fine-dining restaurant. You decide to use the cash generated from your existing business to enter into a new business. Your accountant provides you with the following data on your current financial performance: Financial update as of June 15 • Your existing business generates $123,000 in EBIT. • The corporate tax rate applicable to your business is 25%. • The depreciation expense reported in the financial statements is $23,429. • You don’t need to spend any money for new equipment in your existing cafés; however, you do need $18,450 of additional cash. • You also need to purchase $9,840 in additional supplies—such as tableclothes and napkins, and more formal tableware—on credit. • It is also estimated that your accruals, including taxes and wages…
- You are an investor looking to buy an ownership interest in a business. One company is a manufacturing company and the other is an online retailer. Here are the cash flow summaries for both: MFR ONLINE RETAILER Cash from Operations $75,000 $15,000 Cash from Financing 50,000 75,000 Cash from Investing <75,000> <25,000> Net Free Cash Flow $50,000 $65,000 If your most important investment criterion is “quality of cash flow” which of these two companies would you choose to invest your money in? Why?You are the chief financial officer (CFO) of Gaga Enterprises, an edgy fashion design firm. Your firm needs $11 million to expand production. How do you think the process of raising this money will vary if you raise it with the help of a financial institution versus raising it directly in the financial markets? ... The process of raising the money will vary if you raise it with the help of a financial institution versus raising it directly in the financial markets. Select all the statements below which support this statement: (Select all the answers that apply.) A. Raising the money directly in the financial markets will allow the Gaga Enterprises CFO to avoid the investment bank's commissions and thus raise more money at a lower cost per dollar raised. B. The investment banking institution will allow the Gaga Enterprises CFO to raise more money at a lower cost per dollar raised. C. Financial institutions, such as investment banks, provide expertise in the acquisition of funds. D.…You are preparing the business plan for a new company. A net revenue analysis covering the first 6 years is required for obtaining financing. Net revenue in year 1 is expected to be $50,000 and increase by 15% each year, thereafter. If i = 12% and the net revenue is assumed to be an end-of-year cash flow, what is the present value of the cash flow series over the 6 years?
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