The additional profit contribution from sales that the firm will realize if it makes the proposed change.

Question

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Answer 1

Question

Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

b.

Summary Introduction

To determine: The marginal investment in account receivables.

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

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Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet Sales Costs $ 40,000 Assets 34,160 $26,000 Debt Equity $ 7,000 19,000 Net income $ 5,840 Total $26,000 Total $26,000 The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement Sales Costs $ 48000 40992 Assets $ 31200 Pro forma balance sheet Debt 7000 Equity 19000 Net income $ 7008 Total $ 31200 Total 30304 What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) External financing needed $ 896

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Answer 2

Question

Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

b.

Summary Introduction

To determine: The marginal investment in account receivables.

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

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Answer 3

Question

Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

b.

Summary Introduction

To determine: The marginal investment in account receivables.

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

Expert Solution & Answer

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Answer 4

Question

Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

b.

Summary Introduction

To determine: The marginal investment in account receivables.

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

Expert Solution & Answer

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Answer 5

Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

b.

Summary Introduction

To determine: The marginal investment in account receivables.

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

Answer 6

Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

Answer 7

Chapter 15, Problem 15.8P

a.

Summary Introduction

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

Answer 8

b.

Summary Introduction

To determine: The marginal investment in account receivables.

Answer 9

b.

Summary Introduction

To determine: The marginal investment in account receivables.

Answer 10

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

Answer 11

c.

Summary Introduction

To determine: The cost of the marginal investment in account receivables.

Answer 12

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

Answer 13

d.

Summary Introduction

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 15.1 - Why is working capital management one of the most...Ch. 15.1 - Prob. 15.2RQ Ch. 15.1 - Prob. 15.3RQ Ch. 15.2 - Prob. 15.4RQ Ch. 15.2 - Prob. 15.5RQ Ch. 15.2 - What are the benefits, costs, and risks of an...Ch. 15.2 - Prob. 15.7RQ Ch. 15.3 - Prob. 1FOP Ch. 15.3 - Prob. 15.8RQ Ch. 15.3 - Briefly describe the following techniques for...

The additional profit contribution from sales that the firm will realize if it makes the proposed change.

Solution Summary: The author calculates the additional profit contribution from sales that the firm will realize if it makes the proposed change.

Concept explainers

To determine: The additional profit contribution from sales that the firm will realize if it makes the proposed change.

To determine: The marginal investment in account receivables.

To determine: The cost of the marginal investment in account receivables.

To discuss: The firm implements the proposed change and other information would be helpful in your analysis.

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Chapter 15 Solutions