QUESTION Ritchie Marble Company has total assets of $12,899,450, sales of $18,174,652, and net income of $4,589,774. Management expects sales to grow by 25 percent next year. All assets and costs (including taxes) vary directly with sales, and management expects to maintain a payout ratio of 65 percent. Calculate Ritchies EFN. Concept: External fund needed […]
QUESTION 1. Compute the price of a share of stock that pays a $1- per-year dividend and that you expect to be able to sell in one year for $20, assuming you require a 15% return. 2. After careful analysis, you have determined that a firm s dividends should grow at 7% on average in […]
QUESTION List two useful tools to help an entrepreneur to understand the cash requirements of a business and to estimate the financing needs of his or her business. irm. This is the pessimistic condition when the company is not able to collect all the receivables in the current period. Financing needs are dependent on the […]
QUESTION 1. Which of the following three expressions uses the economists definition of money? a. How much money did you earn last week? b. When I go to the store, I always make sure that I have enough money. c. The love of money is the root of all evil. 2. There are three goods […]
QUESTION Inventory Types what are the different inventory types? How do the types differ? Why are some types said to have dependent demand whereas other types are said to have independent demand? Inventory are the raw materials, work in process and finished goods that are the part of business assets and are ready for sale […]
QUESTION (Computation of Future Values and Present Values) Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.) (a) What is the future value of $9,000 at the end of 5 periods at 8% compounded interest? (b) What is the present value of $9,000 due 8 periods […]
QUESTION Champoux Hair Factory, Inc., has earnings before interest and taxes of $200,000. Annual interest amounts to $80,000, and annual depreciation is $80,000. Taxes are computed at a 40 percent rate. Existing bond obligations require the payment of $40,000 per year into a sinking fund. Champoux wishes to pay a $2 per-share dividend on the […]
QUESTION A firm is about to double its assets to serve its rapidly growing market. It must choose between a highly automated production process and a less automated one. It also must choose a capital structure for financing the expansion. Should the asset investment and financing decisions be jointly determined, or should each decision be […]
QUESTION The MacBurger Company, a chain of fast-food restaurants, expects to earn $200 million after taxes for the current year. The company has a policy of paying out half of its net after-tax income to the holders of the companys 100 million shares of common stock. A share of common stock of the company currently […]
QUESTION On January 1, 2010, Corgan Company acquired 80 percent of the outstanding voting stock of smashing, Inc., for a total of 980,000 in cash and other consideration, at the acquisition date, smashing had common stock of 700,000 retained earnings of 250,000 and a noncontrolling interest fair value of 245,000. Corgan attributed the excess of […]
