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Working Capital Management

Cost of debt and discount rate

In the weighted cost-of-capital, why is the cost of debt always calculated as an after-tax cost, or debt percent * (1-tax rate)? Briefly explain how the discount rate, or the cost-of-capital, be used to represent the risk associated with a particular investment opportunity?

Multiple Choice Questions: Working Capital, Dividends, treasury stock, issuance of shares, income statement,

13-2. Assume a company's current ratio is less than one. If the company pays current liabilities with cash, the new current ratio will: b. decrease. c. remain the same. d. cannot be determined with the information given 12-3. Stockton-Meadows Incorporated reports an increase in Accounts Payable of \$9,200 and an increas

Cost of capital

Suppose a firm estimates its cost of capital for the coming year to be 10%. What are reasonable costs of capital for evaluating average risk projects, high risk projects and low risk projects.

Capital Rationing

Evaluating capital rationing -------------------------------------------------------------------------------- Please explain how to evaluate a corporations capital rationing plan. How to determine if it is a good policy? And how to determine what better polcy to use. I'm looking for nuts and bolts, or better the logic and

Multiple Choice Questions on Time Value of Money, Capital Struture, Dividend policy, Working Capital

1. The concept of compound interest refers to: A) earning interest on the original investment. B) payment of interest on previously earned interest. C) investing for a multi-year period of time. D) determining the APR of the investment.

Calculate capitol gain, dollar return, yield

One year ago, Seth invested \$10,400 in 200 shares of ABC company Imc. Stock and just received a dividend of \$600. Today, the shares are sold for \$54.25 per share a) what is Seth's capitol gain? b) What is Seth's total dollar return? c) What was Seth's percentage return? d) What is the stock's dividend yield?

Capital One Case Study

Prompt: I am doing a case study on Capital One. The CEO saw three types of opportunities on the internet. First the company discovered that many of its customers were already visiting the website, capitalone.com, to see if transactions had cleared, to check balances, and tp pay bill. On average, online users visted the si

Net Working Captital

(See attached file for full problem description) Marble Comics Group Balance Sheets 12/31/1999 and 12/31/2000 (\$ in millions) 1999 2000 1999 2000 Cash \$75 \$135 Accounts Payables \$89 \$110 Accounts Receivables \$230 \$214 Short term Notes Payable \$227 \$442 Invent

Solve: Marginal Cost of Capital

Question: The weighted average cost of capital for firm X is currently 10%. Firm X is considering a new project, but must raise new debt to finance the project. Debt represents 25% of the capital structure. If the after tax cost of debt will rise form 7% to 8%, what is the marginal cost of capital? A)10.25%, B)10.75% C

Executive Briefing: Capital Generation in Less Developed and Emerging Markets

Please answer the following questions: 1) Major multinational organizations such as Acme attempt to track the relative movements and magnitudes of global capital investment. Prepare a executive briefing on the question of whether capital generated in the industrialized countries is finding its way to the less-developed and e

Net working capitol

True of false Net working capital has increased and cash flow decreases by \$15,000 when a project would increase accounts receivable by \$10,000, accounts payable by \$35,000, and inventory by \$30,000.

Net working capital, change in NWC, and capital expenditures

Need help trying to figure out how certain figures were derived for net working capital, then the change in net working capital, and capital expenditures so I can figure out the free cash flows. (See attached file for full problem description) --- Question: I am suppose to figure out how \$7,385 (from the year1999 to 200

Return on assets/equity

I need to know what calculations are needed in the problems and a brief explanation. Problem 1 Lily cosmetics has annual sales of \$50m Maintains a net after tax profit margin of 5% Sales to asset ratio of 4 a. What is its return on assets? b. If it's debt/equity ratio is .5, then what is the return on equity? Prob

Cross listing

The internationalization of capital markets suggests that the world is moving toward an integrated, global capital market (and away from segmented domestic markets). Currently, multinational firms often list their stocks on foreign stock exchanges, an activity referred to as cross listing. For example, Sony cross-lists its Japan

Compute: Net Operating Working Capital

Question: A company has the following balance sheet. What is its net operating working capital? Cash: \$ 10 Accounts payable: \$ 20 Short-term investments: 20 Accruals: 30 Accounts receivable : 30 Notes payable: 20 Inventory: 40 Current liabilities: 70 Current assets: 100 Long-term debt: 30 Net fixed assets:

Importance of Working capital

Although working capital is rarely disclosed on the balance sheet, it is a useful tool for financial statement users. Who may be interested in this information and for what reasons? Discuss any requirements in this area that an insurance company may be required to meet, and for what reasons.

WC

XYZ Company is trying to determine the optimal level of assets for the coming year. Sales are expected to increase to \$2 million dollars. Fixed assets total \$1 million, the firm wishes to maintain 60% debt ratio. Interest cost is currently 8 Percent on short-term & long-term debt. 3 options are available to the firm. (1)

Balance Sheet formation to know working capital requirements

Mars Electronics is a distributor for the Global Electric Company [GEC], a large manufacturer of electrical and electronics products for consumer and institutional markets. Below are the annual financial statements of the company for the last 2 years . Income Statements \$ thousands 12 months Ending 6/30/1999 12 Months

Managerial balance sheet converstion

I need this converted I have no clue how to do it see attached file and the questions answered and copied here: 1. Restate the following balance sheet into managerial balance sheet format. What does working capital requirement (WCR) mean? Balance

You work for an large investment firm and recently wrote a position article on your firm's approach to investing for the small investor, titled "Investing is for the little guy". The article now appears on your company's website. It has, interestingly enough, generated e-mailed responses from potential clients and your firm is a

Working capital

Write a 2-page paper discussion working capital, net working capital and working capital policy. Include in your discussion the advantages and disadvantages of offering your customers credit. Any ideas or suggestions?

Cash Flows and Working Capital

A firm's balance sheets for year-end 2003 and 2004 contain the following data. What happened to investment in net working capital during 2004? All times are in millions of dollars. Dec. 31, 2003 Dec. 31, 2004 Accounts receivable

Cash Flows and Working Capital

The only capital investment required for a small project is investment in inventory. Profits this year were \$10,000 and inventory increase from \$4000 to \$5000. What was the cash flow from this project?

Demello case 27 Working Capital Management

Need help with question 3 (see attached) --- 3. How long are the firm's operating and cash cycles? Using a suitable diagram show the breakdown of the firm's operating cycle into its relevant components. What do your findings indicate? "We have done it again," said George Brash, the president and chief execut

Raising Capital Via Stock Issue With Underwriting

I want to check my logic. Based on my calculations the underwriter would loss money. But that makes no sense. (See attached file for full problem description) --- If a corp wants to raise \$20 million & its stock price is now \$20 per share. The new issue will be priced at \$18 per share. The underwriters' compensation w

Working Capital Management Problems

Working Capital Management. Indicate how each of the following six different transactions that Dynamic Mattress might make would affect (i) cash and (ii) net working capital: a. Paying out a \$2 million cash dividend. b. A customer paying a \$2,500 bill resulting from a previous sale. c. Paying \$5,000 previously owed to one o

Cost of capital

Company issued \$100 par value preferred stock 12 years ago. The stock provided a 9% yield at the time of the issue. The preffered stock is now selling for \$72. What is the current yield or cost of preffered stock? (disregard flotation costs)

Describe how the services it offers will take care of Acme's international working capital management requirements...

The Acme Company is exploring many strategic options. Whichever global business strategy the Acme Company eventually chooses, the firm inevitably will require the services of a bank to help manage its working capital. Many major multinational banks provide a variety of working capital and multinational cash management services.

Working capital

Working Capital Management. Indicate how each of the following six different transactions that Dynamic Mattress might make would affect (i) cash and (ii) net working capital: a. Paying out a \$2 million cash dividend. b. A customer paying a \$2,500 bill resulting from a previous sale. c. Paying \$5,000 previously owed to one of

Capital Investment Analysis 4

Please show how answer is obtained The present value of \$20,000 (rounded to the nearest dollar) to be received two years from today, assuming an earnings rate of 12% is: a. \$17,860 b. \$15,940 c. \$14,240 d. \$12,720