Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Textbook Question
Chapter 27, Problem 4P
Quarterly working capital levels for your firm for the next year are included in the following table. What are the permanent working capital needs of your company? What are the temporary needs?
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Please select the option that best analyzes the WORKING CAPITAL for our example company.
The working capital represents the amount of current assets available to settle our current liabilities. Our example company will definitely be able to pay their current liabilities as they come due.
The working capital represents the amount of current assets available to settle our current liabilities. The current liabilities are not due for more than two years so our current asset amounts are inconsequential.
The working capital represents the amount of current assets available to settle our current liabilities. Our example company will be unable to pay their current liabilities as they come due.
The working capital represents the amount of current assets available to settle our current liabilities. We cannot determine if our example company will be able to pay their current liabilities as they come due.
Assuming you are facing with making a decision on a large capital investment proposal. the capital investment amount is $________,Estimated the study period is _____years .The annual revenue at the end of each year is $_______, and the estimated annual year-end expense is $______starting in year _____, Assuming a market value at the end year is $ ______, and the benchmark rate is 10%, please answer the following questions:
1.Please design this investment project to fill the proper number in blank space to let the project is feasible in economics
A. Assume that you have completed your plans and proformas for the next year of operations. The upcoming year looks promising. What would you most likely do from the following list?
a. From your proformas project your company’s weighted average cost of capital and return on assets, and compare the two
b. Take a vacation because you have been working so hard
c. Purchase a new house for your personal use because the future is looking so good
d. Make sure that your company’s weighted average cost of capital exceeds your company’s return on assets, if not, rework your plans and proformas
B. Assume that all sales are on account. If the average accounts receivable balance was $1,000,000 and accounts receivable turnover was 12 for the last year of operations, what was sales revenue?
a. $10,000,000
b. $15,000,000
c. $12,000,000
d. $6,000,000
Chapter 27 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 27.1 - Prob. 1CCCh. 27.1 - What is the effect of seasonalities on short-term...Ch. 27.2 - Prob. 1CCCh. 27.2 - What is the difference between temporary and...Ch. 27.3 - Prob. 1CCCh. 27.3 - Describe common loan stipulations and fees.Ch. 27.4 - What is commercial paper?Ch. 27.4 - How is interest paid on commercial paper?Ch. 27.5 - Prob. 1CCCh. 27.5 - What is the difference between a floating lien and...
Ch. 27 - Prob. 1PCh. 27 - Sailboats Etc. is a retail company specializing in...Ch. 27 - What is the difference between permanent working...Ch. 27 - Quarterly working capital levels for your firm for...Ch. 27 - Prob. 5PCh. 27 - Prob. 6PCh. 27 - Prob. 7PCh. 27 - Prob. 8PCh. 27 - Which of the following one-year 1000 bank loans...Ch. 27 - The Needy Corporation borrowed 10,000 from Bank...Ch. 27 - Prob. 11PCh. 27 - Prob. 12PCh. 27 - Prob. 13PCh. 27 - The Signet Corporation has issued four-month...Ch. 27 - Prob. 15PCh. 27 - Prob. 16PCh. 27 - Prob. 17PCh. 27 - Prob. 18P
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