Considering the executive team, what were the problems with team inputs, processes and structures that contributed to the downfall of Long Term Capital Management? Were the members of LTCM simply unlucky (the victim of forces beyond its control) or were there more systematic, predictable (and, ultimately, avoidable) reasons for
Presented below is information related to Edis Corporation: Common Stock, $1 par $4,300,000 Paid-in Capital in Excess of Par?Common Stock 550,000 Preferred 8 1/2% Stock, $50 par 2,000,000 Paid-in Capital in Excess of Par?Preferred Stock 400,000 Retained Earnings
What ethical implications arise as a result of an organization employing various working capital strategies to realize long-term opportunities.
LePage Co. expects to earn $2.50 per share during the current year, its expected payout ratio is 55%, its expected constant dividend growth rate is 6.0%, and its common stock currently sells for $22.50 per share. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would
Why is working capital important? Which stakeholders are affected by working capital?
Pula Paper Ltd is a manufacturer of facial tissues. The company needs to borrow $1,000,000 to help finance seasonal inventory build-up prior to the Lunar New Year. The company is considering the following alternatives for financing its working capital. Option A: The company may issue $1,000,000 in 180-day maturity commercial
Yoshida owns two parcels of business land (Section 1231 assets). One parcel can be sold at a loss of $30K, and the other parcel can be sold at a gain of $40K. Yoshida has no norecaptured Section 1231 losses from prior years. The parcels could be sold at any time because potential purchasers are abundant. Yoshida has a $25K s
On June 30, 2006, Victor Company's total current assets were $160,000 and its total current liabilities were $100,000. On July 1, 2006, Victor issued a short-term note to a bank for $25,000 cash. A. Compute Victor's working capital before and after issuing the note. B. Compute Victor's current ratio before and after issui
Q1) Major multinational organizations such as Acme (some of which are listed below) attempt to track the relative movements and magnitudes of global capital investment. Using these web pages and others you may find, prepare a 5-6 paragraph executive briefing on the question of whether capital generated in the industrialized coun
A company forecasts free cash flows in one year to be (negative) -$10 Million and free cash flow in two years to be $20 Million. After the second year, free cash flow will grow at a constant rate of 4% per year for the foreseeable future. If the overall cost of capital is 14%, what is the current value of the operations?
How are, or, how can different types of firms' capital requirements be altered by external events? You will have to take into account different industries and types of companies; Are their specific lessons in dealing with those changing capital requirements that may be able to take home to utilize on the domestic front?
How do we "manage" the levels of working capital required in a business?
ACME Corp is a publicly traded firm listed on the NASDAQ. Its current common stock price is 10 dollars per share. The company currently has 75 million dollars in sales. It expects sales to grow at 3 percent a year for the next several years. The company's current fixed costs are 50 million dollars. The federal tax rate is 4
A U.S multinational corporation is considering a new project in Poland, which requires an initial investment of 700 million zloty. The project is expected to have profits of 400 million zloty in the first year of operations and 600 million zloty in the second year of operations. The current exchange rate is $0.35/zloty. The risk
One year ago, Mr. Seth Cohen invested 10.400 dollars in 200 shares of First Industries Inc. stock and just received a dividend of 600$. Today he sold the 200 shares at 54.25$ per share. a. What was his capital gain? b. What was his total dollar return? c. What was his percentage return? d. What was the stocks dividend
Explain why working capital management has become increasingly important in the current business environment. Provide at least two examples of organizations that have good working capital management policies, and two examples of organizations with poor working capital management policies. Be sure to explain why the policies of y
During its fiscal year, a company had outstanding 600,000 shares of $6.50 preferred stock and 2,000,000 shares of common stock. The company's net income for the year was $19,550,000. The company also had granted stock options to employees for 200,000 shares of common stock during the fiscal year was $20 per share. a. Calculat
What is the profitability ratio, net working capital to total asset ratio for the HOME DEPOT company for the year 2004 2005 Profitability Ratio (net profit margin, return on assets and return on equity.) Net working capital to total asset ratio.
For each of the following situations, the present value concept should be applied; 1. Your wealthy aunt has just established a trust fund for you that will accumulate to a total of $100,000 in 12 years. Interest on the trust fund is compounded annually at an 8% interest rate. How much is your trust fund today? 2. On Ja
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 its suppliers. d. Borrowi
(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
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?.
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
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
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
Should an organization pay its bills on time? Why or why not? Under what circumstances should bank or collateralized loans be procured to pay these liabilities? Why is inventory necessary? Why is it important to turn inventory as soon as possible? How could a company improve its inventory turns?
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
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,
My company recently reported sales of $100 million, and net income equal to $5 million. My company has $70 million in total assets. Over the next year, I'm forecasting a 20 percent increase in sales. Since my company is at full capacity, its assets must increase in proportion to sales. I estimate that if sales increase 20 percen
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