Purchase Solution

You are the financial manager at CYA Corp.

Not what you're looking for?

Ask Custom Question

Hello,

I have a lot of doubt in this question.

A- You are the financial manager at CYA Corp. and you are considering three different levels of working capital. You estimate that sales would decrease slightly with lowered levels of current assets and you assume that your forecasts are reasonably accurate. CYA has $35 million in fixed assets. Your working capital options and the estimated operating results are listed below. (15 ptos)

Option Working Capital (in millions) Sales Forecast
(in millions) Net Profit
(in millions)
A $40 $133 $16.0
B 35 129 15.5
C 30 125 15.0

1- Which option would you consider to be the most conservative and which is the most aggressive?

2- Calculate the return on investment (ROI) for each option. Which option would be potentially most profitable?

3- Which option would you choose? Why?

Attachments
Purchase this Solution
Solution Summary

This solution is comprised of a detailed explanation to answer which option would you consider to be the most conservative and which is the most aggressive.

Solution Preview

A- You are the financial manager at CYA Corp. and you are considering three different levels of working capital. You estimate that sales would decrease slightly with lowered levels of current assets and you assume that your forecasts are reasonably accurate. CYA has $35 million in ...

Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Operations Management

This quiz tests a student's knowledge about Operations Management

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

View More Free Quizzes
Related BrainMass Solutions

  • Bank of America

    The industry in which Bank of America Corp belongs to is banking, financial services, and investment services. In 2008, Bank of America Corp acquired Merrill Lynch which made the bank the world largest wealth manager.

  • Smith Corp. East Corp., Terry Transport, Merrick - Tax entry

    $ 4,667 Question 5 You are the new accounting manager at the Terry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following: a.

  • Arista Corporation Quality of Earnings Case Study

    Add up your results on the worksheet to arrive at Arista's true earnings figure. 4. Comment on your findings. What are the implications of your analysis to a banker or investment manager who might be reviewing your work?

  • Global manufacturing and services organization

    354659 Discuss how management has changed with respect to both of the topics you selected. You are a manager in a large global manufacturing and services organization.

  • sexual harassment complaints

    308547 Sexual Issues & Discrimination In your role as the new human resources (HR) manager, you plan to prepare a series of videos with various scenarios.

  • Mother Corp Consolidation Son and Daughter Non-controlling

    Hansen tells me that you guys are experts at accounting for investments, and I look forward to seeing the financial statements. I am especially eager to be able to show my boss how much money we made by buying these investments.

  • Merger and acquisition for Sony and MGM

    For the company that we chose, which is Sony Corp., we can see if the merger and acquisition will provide the anticipated benefits to Sony Corp. by looking at the financial results. The sales of the Sony Corp.'

  • Financial Management

    230416 Identify four financial ratios and why it's important to understand what ratios mean Financial ratios are important to the understanding of the financial health of a company. You and your colleagues work for a financial services firm.

  • Standard Unqualified Audit Report

    In our opinion, except for the effects of ABC Corp's valuation of fixed assets at their replacement cost, the financial statement referred to in the first paragraph presents fairly, in all material respects, the financial position of ABC Corp (Crumbley

View More Related Solutions