Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
bartleby

Concept explainers

bartleby

Videos

Textbook Question
Book Icon
Chapter 26, Problem 15P

Use the financial statements supplied on the next page for International Motor Corporation (IMC) to answer the following questions.

  1. a. Calculate the cash conversion cycle for IMC for both 2015 and 2016. What change has occurred, if any? All else being equal, how does this change affect IMC’s need for cash?
  2. b. IMC’s suppliers offer terms of Net 30. Does it appear that IMC is doing a good job of managing its accounts payable?
International Motor Corporation
Income Statement (in $ million) for the Years Ending December 31
  2015 2016
Sales $ 60,000 $ 75,000
Cost of goods sold 52,000 61,000
Gross profit $ 8,000 $ 14,000
Selling and general and administrative expenses 6,000 8,000
Operating profit $ 2,000 $ 6,000
Interest expense 1,400 1,300
Earnings before tax $ 600 $ 4,700
Taxes 300 2,350
Earnings after tax $ 300 $ 2,350

Chapter 26, Problem 15P, Use the financial statements supplied on the next page for International Motor Corporation (IMC) to

Blurred answer
Students have asked these similar questions
You plan to purchase a $200,000 house using either a 30-year mortgage obtained from your local savings bank with a rate of 7.25 percent, or a 15-year mortgage with a rate of 6.50 percent. You will make a down payment of 20 percent of the purchase price. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid? Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages?
Problem 2-21 Financial Statements Use the following information for Ingersoll, Incorporated. Assume the tax rate is 23 percent. 2020 2021 Sales Depreciation $ 19,073 $17,436 1,811 1,886 Cost of goods sold 4,729 4,857 Other expenses 1,021 899 Interest 870 1,001 Cash 6,292 6,916 Accounts receivable 8,190 9,877 Short-term notes payable 1,320 1,297 Long-term debt 20,770 25,011 Net fixed assets 51,218 54,723 Accounts payable 4,624 5,094 Inventory 14,538 15,438 1,700 1,768 Dividends Prepare a balance sheet for this company for 2020 and 2021. (Do not round intermediate calculations.) Cash Assets Accounts receivable Inventory INGERSOLL, INCORPORATED Balance Sheet as of December 31 2020 2021 $ 6,292 $ 6,916 8,190 9,877 14,538 15,438 Drov 14 of 20 Ne
Problem 6-35 Financial Break-Even Analysis The technique for calculating a bid price can be extended to many other types of problems. Answer the following questions using the same technique as setting a bid price; that is, set the project NPV to zero and solve for the variable in question. Martin Enterprises needs someone to supply it with 152,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost $1,920,000 to install the equipment necessary to start production; you'll depreciate this cost straight-line to zero over the project's life. You estimate that, in five years, this equipment can be salvaged for $162,000. Your fixed production costs will be $277,000 per year, and your variable production costs should be $10.60 per carton. You also need an initial investment in net working capital of $142,000. The tax rate is 22 percent and you require a return of 12 percent on your investment.…
Knowledge Booster
Background pattern image
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Entrepreneurial Finance
Finance
ISBN:9781337635653
Author:Leach
Publisher:Cengage
Text book image
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Text book image
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Text book image
Corporate Fin Focused Approach
Finance
ISBN:9781285660516
Author:EHRHARDT
Publisher:Cengage
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License