You are considering adding a microbrewery onto one of your firm's existing restaurants. This will entail an increase in inventory of $9,200, an increase in accounts payables of $2,400, and an increase in property, plant, and equipment of $43,000. All other accounts will remain unchanged. The change in net working capitalresulting from the addition of the microbrewery is:O A. $8,160O B. $11,600OC. $6,800O D. $49,800

Working capital can be calculated by difference between current assets and current laibilties.

You are considering adding a microbrewery onto one of your firm's existing restaurants. This will entail an increase in inventory of $9,200, an increase in accounts payables of $2,400, and an increa resulting from the addition of the microbrewery is: O A. $8,160 O B. $11,600 OC. $6,800 OD. $49,800

You are considering adding a microbrewery onto one of your firm's existing restaurants. This will entail an increase in inventory of $9,200, an increase in accounts payables of $2,400, and an increa resulting from the addition of the microbrewery is: O A. $8,160 O B. $11,600 OC. $6,800 OD. $49,800

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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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
Kate is considering expanding and bringing in several employees. To do this she will need a larger facility and to purchase more equipment. Which means additional financing. Answer this: look at the financial statements as if you were a banker considering her for a loan comment on your findings and use calculations to support your answer.
Assume that you are thinking about starting your own small business. You have made the following estimates regarding this opportunity: • You can rent a location for your business at a cost of $36,000 per year. The equipment costs incurred to start the business would total $250,000. The equipment would have a 5-year useful life and a salvage value of $25,000 Your company's estimated sales per year would equal $350,000 and its variable cost of goods sold would be 30% of sales. • Other operating costs would include $58,000 per year in salaries, $4,000 per year for insurance, $25,000 per year for utilities, and a 3% sales commission The simple rate of return for this investment opportunity is closest to: Multiple Choice 22.0% 19.0% 26.6% 15.7%
You are considering adding a microbrewery onton one of your firm's exisiting restaurants. this will entail an increase inventory of $8700, an increase in accounts payables of $23.00, and an increase in property, plant, and equipment of $48,000. All other accounts will remain unchanged. The change in net working capital results from the addtion of the microbewery is?
Answer the question below
You are considering a new product line for your business. The new product line will require investment of $3,000,000 in new equipment. The equipment will be trucked to your facility at a cost of $25,000 and will require another $250,000 to modify that equipment for use in your facility. The new product line will require an increase in inventory of $200,000, an increase in accounts receivable of $100,000, but you believe you will be able to get suppliers to offer good credit terms which should increase accounts payable by $250,000, and you will obtain a short term bank loan, increasing notes payable by $25,000. The equipment falls into the 3- year MACRS class (rates of 33%, 45%, 15%, and 7% in years 1-4, respectively). You expect to operate the new product line for only three years and then shut down operations. The salvage value of the equipment at time three is expected to be $385,000. The new product line is expected to lead to sales of $1.4 million the first year with inflation of…
Bark and Bliss Limited is a pet supply company headquartered in Edmonton, Alberta. They have four different lines of business. Here is an excerpt of their financial statements for the December 31, 2020 fiscal year: Dog Walking Brick & Division Online Shop Pet Training & Pet Care Mortar Stores Sales $4 22,500,000 13,980,000 27,630,500 5,407,000 Net operating income $4 1,250,000 1,840,000 2,845,200 1,134,750 Average operating assets $4 7,580,000 8,275,000 14,500,000 5,250,000 Bark and Bliss Limited has a policy that all investments must have a rate of return of at least 15%. Required: a. What is the return on investment for each of Bark and Bliss' four lines of business? Round your calculations to one decimal place. b. If the Online Store division was able to reduce its operating expenses by $57,000, what would be its new return Ati Go to on investment?

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