Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) Lemond Cyclery custom produces cutting-edge triathlon bikes utilised by world-class athletes for main competitive events like the Ironman in Hawaii. Firm makes each bike by using its proprietary titanium blend, which is ultra flexible, super light, very strong, and very expensive. Its bikes sell for= $35,000 each. In 2014, company has= $4.5 million in revenue, and= $2.4 million in net income. Lemond Cyclery began the year with= $6 million in book equity on January 1. Complete the given, and illustrate all your computaions for each:

a) Estimate firm’s 2019 sales, suppose a 45% sales growth rate per year starting in 2015.

b) Suppose Lemond Cyclery pays out no dividends in 2014, determine the firm’s maximum sustainable growth rate?

c) Compare Lemond Cyclery’s probable sales growth rate and firm’s maximum sustainable growth rate (which you just computed in (b). Will firm be able to support its growth through internally generated funds? If so, describe financial reasons why this is so by using textbook’s concept of maximum sustainable growth rate. If you think firm will not be able to support its growth, use data to describe why, and describe what action management should take.

d) Part 1: If firm pays out= $960,000 in dividends during 2014, determine the firm’s retention rate? Part 2: Suppose the firm pays out= $960,000 in 2014 dividends, determines Lemond Cyclery’s sustainable growth rate?

e) After paying= $960,000 in 2014 dividends on December 31, compute Lemond Cyclery’s new book equity balance.

f) Use your final answer for (e) to reply the given: if Lemond Cyclery’s balance sheet illustrates assets with the book value of $9.6 million, how much debt does firm have?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915276

Have any Question? 


Related Questions in Basic Finance

1 why is the use of long-term debt financing referred to as

1. Why is the use of long-term debt financing referred to as using financial leverage? 2. What is the fundamental principle of financial leverage? 3. What is the basic conclusion of the original Modigliani and Miller Pro ...

1 what is the relationship between confounding and internal

1. What is the relationship between confounding and internal validity? 2. What are experimenter expectancy effects, and how do researchers minimize them? 3. Should demand characteristics be eliminated or strengthened in ...

1 what is the difference between earnings per share eps

1. What is the difference between earnings per share (EPS), funds from operations (FFO), adjusted funds from operations (AFFO), and dividends per share? 2. Explain how an investor in an equity REIT may receive a current ...

1 consider the similarities and differences between basic

1. Consider the similarities and differences between basic research and applied research. What does each contribute to our knowledge about behavior? 2. Describe the characteristics of descriptive, correlational, and expe ...

Florence transferred 300000 to an irrevocable trust for her

Florence transferred $300,000 to an irrevocable trust for her two children. She granted them a noncumulative right to withdraw the greater of $5,000 or 5% of trust assets each year. Her children did not make any withdraw ...

If you were a commercial credit analyst charged with the

If you were a commercial credit analyst charged with the responsibility of making an accept/reject decision on a company's loan request, with which financial statement would you be most concerned? Which financial stateme ...

Imagine that you have collected the following set of iq

Imagine that you have collected the following set of IQ scores: a . Construct a simple frequency distribution of these scores. b. Construct a grouped frequency distribution of these scores that includes both frequencies ...

You have just performed a scenario analysis on a project

You have just performed a scenario analysis on a project, with the following results: Best Case: with a 35% probability, you get an NPV of $77 Base Case: with a 55% probability, you get an NPV of $24 Worst Case: with a 1 ...

1 why are psychologists sometimes interested in

1. Why are psychologists sometimes interested in epidemiology? 2. Why do researchers use probability rather than nonprobability samples when doing descriptive research?

In a column in the new york times harvard economist edward

In a column in the New York Times, Harvard economist Edward Glaeser argues: "Theory and data both predict that the 1.2 percentage point drop in real interest rates that America experienced between 1996 and 2006 should ca ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro