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Working Capital Management

Working Capital Management

(1). Indicate by a (+), (-), or (0) whether each of the following events would probably cause accounts receivable, sales, and profits to increase, decrease, or be affected in an indeterminate manner A/R Sales Profits The firm tightens its

Working Capital Management, Credit and Policies

1. Why is some trade credit called free while other credit is called costly? If a firm buys on terms on 2/10,net 30, pays at the end of the 30th day, and typically shows $300,000 of accounts payable on its balance sheet, would the entire $300,000 be free credit? Would it be costly credit, or would some be free and some costly?.

Journalize stock transactions, post, and prepare paid in capital - Hayslett Corp.

Hayslett Corp was organized on Jan. 1,2006. It is authorized to issue 20,000 shares of 6%m $50 par value preferred stock, and 500,000 shares of no par common stock with a stated value of $2 per share. The following stock transactions were completed during the first year. jan 10-issued 100,000 shares of common stock for cash a

Current Asset Management - Mountain Home Systems

Mountain Home Systems, Inc. is a well-known and reputable supplier of integrated circuits to manufacturers of telecommunications devices. The firm is currently debating whether to expand its sales to car-telephone manufacturers. While the firm expects an extra $2 million in sales if it enters this market, it also knows that 15

What will be the total return if the available capital is reduced by 2 units?

Please help with the following problem. Eight units of capital can be invested in three activities with the return from each activity given in the accompanying table. Determine the capital allocation to each activity that will maximize the total return. What will be the total return if the available capital is reduced by 2

Capital Investment Analysis

24-1 The following data are accumulated by Environmental Services Inc. in evaluating two competring capital investment proposals: Testing Equip Centrifuge Amount of investment $42,000 $56,000 Useful life 4 years 5 years Estimated residual value -0- -0- Estimated tota

Contributed Capital Problems

Problem 1 Valenti Corporation had 5,000 shares of $100 par value, 9 percent cumulative preferred stock and 30,000 shares of $10 par value common stock outstanding during each of its first four years of operation. The following amounts of cash dividends were paid during the years indicated: 20x1, $0; 20x2, $80,000; 20x3, $220,

Venture Capital

Pickwick Electronics is a new high-tech company financed entirely by 1 million ordinary shares, all of which are owned by George Pickwick. The firm needs to raise $1 million now for stage 1 and, assuming all goes well, a further $1 million at the end of 5 years for stage 2. First Cookham Venture Partners is considering two p

Debt as Attractive Source of Capital

Why is debt an attractive source of capital? What risks does a company incur when it uses debt to fund growth? Why will a company that uses 10% debt have less variability in EPS at different levels of income than a company that uses 25% debt? At what cost of debt will there be no difference in EPS at a given level of income?

Current ratios, working capital, retained earnings, stock

For each of the following numbered items, you are to select the lettered item(s) that indicate(s) its effect(s) on the corporation's statements. If more than one effect is applicable to a particular item, be sure to indicate ALL applicable letters. (Assume that the state statutes do not permit declaration of non liquidating divi

The XYZ company is experiencing a growth rate of 25% per year.

#4 The XYZ company is experiencing a growth rate of 25% per year. As a result of this rapid growth there has been a need to increase working capital. This increase in working capital has traditionally not been managed and has been financed by a short term line of credit at the local bank. The bank has now indicated that they are

Negative Net Working Capital

Is it possible for an organization to operate with negative net working capital? Why or why not? Would a company with high profit margins be more likely to adopt an aggressive or a conservative working capital policy? Why? Is it possible for an organization to be profitable and run out of cash? How?

Optimal Working Conditions

Scenario: The Home Company had been a family owned call-center business for many years. Recently, it had grown so large that it had become impossible for the family structure to handle the 2000 employees that were scattered across the country. A Fortune 200 Company had acquired it and it now has a new Board of Directors. Yo

Working Capital Management Case Study -Xtreme Toys

Xtreme Toys® is a small manufacturing company in Southern California. Management is concerned because as their sales have grown, their cash flow has shrunk. Management doesn't understand how this could happen and has approached your team to find a solution for this dilemma. 1) Part A: Calculate the following: a)

Working Capital Management

1. For retailer, what are the major costs and benefits of holding inventory? what different benefits and costs apply to raw materials inventory held by manufacturer? 2. What is safety stock? Explain how it is possible that safety stock might be negative?

Working Capital Management

A) Dan plans to use the preceding ratios as the starting point for discussions with SKI's operating executives. He wants everyone to think about the pros and cons of changing each type of current asset and how changes would interact to affect profits and EVA. Based on the data in the table, does SKI seem to be following a relax

Case Study- Cost of Capital

I am looking for help in the area of 'financial management.' This 3 question case study deals with the topic: Cost of Capital. (See attached files for full problem description)

Net Working Capital Problem

Mr. Rodney's region reported to headquarters that its NWC was $1547 at the end of 2000, $633 at the end of 2001, and $1294 at the end of 2002. How much was its NWC investment? Please use this NWC formula: NWC=Investment + Accounts Receivable - Accounts Payable change NWC=change Investment + change Accounts Receivable -

Carnival Corp.

Imagine Robert H. Dickinson, President of Carnival Corporation is looking for advice regarding capital investment decisions his company faces in the next five years. Go to the site: http://www.carnivalcorp.com/Sections/InvestorOverview/CorpGov.aspx and visit the Carnival Corporation Web site for background information ab

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