Fundamentals of Corporate Finance, Student Value Edition Plus MyLab Finance with Pearson eText -- Access Card Package (4th Edition)
4th Edition
ISBN: 9780134641928
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Question
Chapter 20, Problem 10CT
Summary Introduction
Pledging account receivables: In a pledging of account receivable arrangement, the lender of loan analyze the invoices of credit sales of the borrowing firm and decides which credit accounts that will be suitable for the lender to accept for collateral for the loan. The lender decides credit account for collateral on the basis of standards.
Factoring account receivables: Factoring is arrangement where the firm’s account receivables are sold to the factor and customer are directed to pay the amount directly to factor. The factor bears the risk related to account receivable of the firm.
To identify:
The difference between pledging of account receivable to secure a loan and factoring of account receivable and types of secured financing that firm can use to cover shortfalls.
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QUESTION #1:
A) What is the Net Operating Profit After Tax (NOPAT) for 2024?B) What is the Operating Cash Flow for 2024?
C) What is the Free Cash Flow for 2024?
Note: Marketable securities are non-operating current assets, and short-term debt (bank loan) is a non-operating current liability. Both of these items are excluded from the calculation of net operating working capital.
D) If the stock trades for $85 per share at the end of 2024, and there are 315,000 shares outstanding, what is the MVA in 2024?
E) Given that the firm’s WACC is 14%, what is the EVA during 2024?
F) Create common size income statement and balance sheet for 2024, 2023 and 2022.
G) Using 2022 as the base year, create income statement and balance sheet percentage change analysis for 2024 and 2023.
QUESTION #2:
In addition to the AAA Ltd. financial statements in Problem One, you are given more information as follows.
Sales are forecast to increase by 80% in 2025.
Short-term Debt, Long-term Debt, and Common…
Brightwoodę Furniture provides the following financial data for a
given enod:
Sales
Less Variable E
Contribwaon Margin
Less Fixed Expenses
et Income
-
Aount ($) Per Unit ($)
150,000
3
L96,000
13
10
35,000
25,000
a. What is the company's CM ratio?
b. If quarterly sales increase by $5,200 and there is no change in fixed
expenses, by how much would you expect quarterly net operating
income to increase?
Chapter 20 Solutions
Fundamentals of Corporate Finance, Student Value Edition Plus MyLab Finance with Pearson eText -- Access Card Package (4th Edition)
Ch. 20 - Prob. 1CCCh. 20 - 2. What is the effect of seasonalities on...Ch. 20 - Prob. 3CCCh. 20 - Prob. 4CCCh. 20 - Prob. 5CCCh. 20 - Prob. 6CCCh. 20 - Prob. 7CCCh. 20 - Prob. 8CCCh. 20 - Prob. 9CCCh. 20 - Prob. 10CC
Ch. 20 - Based on the forecasts in this case, use the...Ch. 20 - Use the following spreadsheet to project Idexo’s...Ch. 20 - Based on the forecasts you have already developed,...Ch. 20 - Prob. 4CQCh. 20 - Prob. 5CQCh. 20 - Prob. 1CTCh. 20 - Prob. 2CTCh. 20 - Which of the following companies are likely to...Ch. 20 - Prob. 4CTCh. 20 - Prob. 5CTCh. 20 - Prob. 6CTCh. 20 - Prob. 7CTCh. 20 - What is the difference between evergreen credit...Ch. 20 - Prob. 9CTCh. 20 - Prob. 10CTCh. 20 - Prob. 11CTCh. 20 - Prob. 1PCh. 20 - Prob. 2PCh. 20 - Prob. 3PCh. 20 - The following table includes quarterly working...Ch. 20 - Prob. 5PCh. 20 - Prob. 6PCh. 20 - Prob. 7PCh. 20 - Hand-to-Mouth (H2M) is currently cash-constrained,...Ch. 20 - Prob. 9PCh. 20 - Prob. 10PCh. 20 - Prob. 11PCh. 20 - Prob. 12PCh. 20 - Prob. 13PCh. 20 - Prob. 14PCh. 20 - Prob. 15PCh. 20 - Prob. 16PCh. 20 - Prob. 17PCh. 20 - Prob. 18PCh. 20 - The Rasputin Brewery is considering using a public...Ch. 20 - Prob. 20P
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