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 do researchers care how much variability exists in a

1. Why do researchers care how much variability exists in a set of data? 2. Distinguish between descriptive and inferential statistics. 3. Conceptually, what does the variance tell us about a set of data?

What is the weekly risk free rate with continuous

What is the weekly risk free rate with continuous compounding (You do not need to calculate the number exactly...a close approximation will be sufficient). Risk Free Rate = 1.79% nominal rate with one compounding period ...

Budgetsmith manufacturing inc has asked for your assistance

Budget Smith Manufacturing, Inc. has asked for your assistance in preparing a budget for next year's operations. Take a few moments to consider where you would begin the budgeting process.What types of information do you ...

Phillips rock and mud is trying to determine the maximum

Phillips Rock and Mud is trying to determine the maximum amount of cash dividends it can pay this year. Assume its balance sheet is as follows: Assets Cash $ 386,000 Accounts receivable 836,000 Fixed assets   1,048,000   ...

Problem suppose the us dollar and euro interest rate for

Problem: Suppose the US dollar and Euro interest rate for the next one year are 1.5% and 2%, respectively. Both are annually compounded. The spot price of Euro is $1.3000, and the one-year forward price of Euro is $1.290 ...

Sorenson inc has sales of 5119000 a gross profit margin of

Sorenson Inc. has sales of $5,119,000, a gross profit margin of 32.18 percent, and inventory of $1,017,000. What are the company's inventory turnover ratio and days' sales in inventory?

Well-sprung corporation is considering offering a new 100

Well-Sprung Corporation is considering offering a new $100 million bond issue to replace an outstanding $100 million bond issue. The firm wishes to take advantage of the decline in interest rates that has occurred since ...

Evaluate visuals used for a presentationattend a business

Evaluate visuals used for a presentation. Attend a business meeting, a city council meeting, a student council meeting, a business conference, an executive lecture presentation, or some other event where oral presentatio ...

1 why should investors review their personal financial

1. Why should investors review their personal financial circumstances from time to time? 2. Why is asset allocation important? 3. List the strategies for increasing returns on a bond portfolio. 4. What are the tools of a ...

1 the rating on an industrial revenue bond is

1. The rating on an industrial revenue bond is representative of the probability of default of bonds issued with the full faith and credit of a governmental unit. Comment. 2. The accounting for not-for-profit institution ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen