Fundamentals of Corporate Finance with Connect Access Card
11th Edition
ISBN: 9781259418952
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 2, Problem 25QP
Use the following information for Taco Swell, Inc., for Problems 25 and 26 (assume the tax rate is 34 percent):
| 2014 | 2015 | |
| Sales | $12,730 | $ 14,229 |
| 1,827 | 1,910 | |
| Cost of goods sold | 4,377 | 5,178 |
| Other expenses | 1,041 | 906 |
| Interest | 854 | 1,019 |
| Cash | 6,674 | 7,113 |
| Accounts receivable | 8,837 | 10,371 |
| Short-term notes payable | 1,288 | 1,262 |
| Long-term debt | 22,352 | 27,099 |
| Net fixed assets | 55,977 | 59,700 |
| Accounts payable | 4,822 | 5,108 |
| Inventory | 15,711 | 16,817 |
| Dividends | 1,522 | 1,780 |
25. Financial Statements [LO1] Draw up an income statement and
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Income Statement (2017)
Credit Sales
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Balance Sheet (2017)
1.500
Cash
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Accounts Payable
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Accounts Receivable
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125
Long-Term Debt
2.092 Common Stock
Retained Earnings 1.132
Taxable Income
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Fixed Assets
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845
Taxes (34%)
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Dividend (33.33%)
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Main assumptions:
Sales has increased by 25% in 2017.
"Cost of goods sold is 80% of sales in the income statement at all times. All other items are
independent of sales.
Each current asset and accounts payable are fractions of sales in the balance sheet. All other items
are independent of sales.
Current ratio is 3, accounts receivable turnover is 2, inventory turnover is 4, accounts payable
turnover is 5 at all times. Turnovers are calculated with respect to the current period balances
without averaging with past year balances.
Throughout the year 2017:
o the company raised funds through short-term debt first.
o the company raised the remaining funds through…
Please provide correct solution
Chapter 2 Solutions
Fundamentals of Corporate Finance with Connect Access Card
Ch. 2.1 - Prob. 2.1ACQCh. 2.1 - What is liquidity? Why is it important?Ch. 2.1 - What do we mean by financial leverage?Ch. 2.1 - Explain the difference between accounting value...Ch. 2.2 - What is the income statement equation?Ch. 2.2 - Prob. 2.2BCQCh. 2.2 - Why is accounting income not the same as cash...Ch. 2.3 - What is the difference between a marginal and an...Ch. 2.3 - Do the wealthiest corporations receive a tax break...Ch. 2.4 - Prob. 2.4ACQ
Ch. 2.4 - Prob. 2.4BCQCh. 2.4 - Why is interest paid not a component of operating...Ch. 2 - What types of accounts are the most liquid?Ch. 2 - What is an example of a noncash expense?Ch. 2 - The marginal tax rate is the tax rate which...Ch. 2 - Prob. 2.4CTFCh. 2 - Prob. 1CRCTCh. 2 - Accounting and Cash flows [LO2] Why might the...Ch. 2 - Prob. 3CRCTCh. 2 - Operating Cash Flow [LO2] In comparing accounting...Ch. 2 - Prob. 5CRCTCh. 2 - Cash Flow from Assets [LO4] Suppose a companys...Ch. 2 - Prob. 7CRCTCh. 2 - Net Working Capital and Capital Spending [LO4]...Ch. 2 - Prob. 9CRCTCh. 2 - Prob. 10CRCTCh. 2 - Prob. 11CRCTCh. 2 - Earnings Management [LO2] Companies often try to...Ch. 2 - Building a Balance Sheet [LO1] KCCO, Inc., has...Ch. 2 - Building an Income Statement [LO1] Billys...Ch. 2 - Dividends and Retained Earnings [LO1] Suppose the...Ch. 2 - Prob. 4QPCh. 2 - Calculating Taxes [LO3] The Dyrdek Co. had 267,000...Ch. 2 - Prob. 6QPCh. 2 - Calculating OCF [LO4] Ridiculousness, Inc., has...Ch. 2 - Calculating Net Capital Spending [LO4] Bowyer...Ch. 2 - Calculating Additions to NWC [LO4] The 2014...Ch. 2 - Cash Flow to Creditors [LO4] The 2014 balance...Ch. 2 - Cash Flow to Stockholders [LO4] The 2014 balance...Ch. 2 - Prob. 12QPCh. 2 - Market Values and Book Values [LO1] Klingon...Ch. 2 - Prob. 14QPCh. 2 - Using Income Statements [LO1] Given the following...Ch. 2 - Preparing a Balance Sheet [LO1] Prepare a 2015...Ch. 2 - Prob. 17QPCh. 2 - Prob. 18QPCh. 2 - Net Income and OCF [LO2] During 2014, Raines...Ch. 2 - Prob. 20QPCh. 2 - Prob. 21QPCh. 2 - Calculating Cash Flows [LO4] Consider the...Ch. 2 - Net Fixed Assets and Depreciation [LO4] On the...Ch. 2 - Prob. 24QPCh. 2 - Use the following information for Taco Swell,...Ch. 2 - Use the following information for Taco Swell,...Ch. 2 - Prob. 1MCh. 2 - Prob. 2M
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