Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Question
Chapter 29, Problem 9PS
a)
Summary Introduction
To determine: The implied level of assets.
b)
Summary Introduction
To determine: The cash need to arise in the capital market by company D.
c)
Summary Introduction
To determine: The debt-ratio of the firm.
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The table given below summarizes the 2022 income statement and end-year balance sheet of Drake's Bowling Alleys. Drake's
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Sales
Costs
Interest
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Income Statement
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$ 2,500
1,875
100
(40% of average assets)
(75% of sales)
(5% of debt at start of year)b
525
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$ 315
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$ in thousands
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$ 2,000
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a. What is the implied level of assets at the end of 2023?
Note: Enter your answer in dollars not in thousands.
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Assumes debt remains constant.
Note: Do…
The following tables summarize the 2022 income statement and end-year balance sheet of Drake's Bowling Alleys. Drake's financial
manager forecasts a 20% increase in sales and costs in 2023. The ratio of sales to average assets is expected to remain at 0.50.
Interest is forecasted at 4% of debt at the start of the year.
Sales
Costs
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Pretax profit
Tax
Net income
INCOME STATEMENT, 2022
(Figures in $ thousands)
$ 1,750
1,050
(50% of average assets) a
(60% of sales)
(4% of debt at start of year) b
24
$ 676
203
$ 473
(30% of pretax profit)
a
b
Assets at the end of 2021 were $3,400,000.
Debt at the end of 2021 was $600,000.
Assets
Total
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(Figures in $ thousands)
$ 3,600
$ 3,600
Debt
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$ 600
3,000
$ 3,600
a. What the implied level of assets at the end of 2023?
Note: Round your intermediate calculations to the nearest whole dollar amount. Enter your answer in thousands.
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Chapter 29 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 29 - Prob. 1PSCh. 29 - Prob. 2PSCh. 29 - Sources and uses of cash and working capital...Ch. 29 - Sources and uses of cash State whether each of the...Ch. 29 - Prob. 5PSCh. 29 - Forecasts of payables Dynamic Futon forecasts the...Ch. 29 - Prob. 8PSCh. 29 - Prob. 9PSCh. 29 - Prob. 10PSCh. 29 - Prob. 11PS
Ch. 29 - Cash cycle A firm is considering several policy...Ch. 29 - Prob. 13PSCh. 29 - Collections on receivables If a firm pays its...Ch. 29 - Short-term financial plans Which items in Table...Ch. 29 - Prob. 16PSCh. 29 - Short-term financial plans Work out a short-term...Ch. 29 - Prob. 18PSCh. 29 - Prob. 19PSCh. 29 - Long-term financial plans Corporate financial...Ch. 29 - Prob. 21PSCh. 29 - Long-term financial plans a. Use the Dynamic...Ch. 29 - Long-term plans The financial statements of Eagle...Ch. 29 - Forecast growth rate a. What is the internal...Ch. 29 - Forecast growth rate Bio-Plasma Corp. is growing...Ch. 29 - Long-term plans Table 29.19 shows the 2016...
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