Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Camping USA Inc. has only been operating for two years in the outskirts of Albuquerque, New Mexico, and is a new manufacturer of a top-of-line camping tent. You are starting an internship as assistant to the chief financial officer of the company, & the owner & CEO, Tom Charles, he decided that this is the right time to know more about the business & financial risks his company must deal with. For this, the CEO has asked you to create an analysis to support him in new meeting with Tom Charles a week from today.

To make the required computations, you have put together the following data regarding the co-structure of the company:

Output level

120,000 units

Operating assets

$6,000,000

Operating asset turnover

12 times

Return on operating assets

48%

Degree of operating leverage

10 times

Interest expense

%720,000

Tax rate

42%

The CEO has instructed you to first estimate the break even points in units of output for the company. He requires that you prepare supporting documents, which demonstrate how you arrive at your conclusion & can facilitates his review of your work. Accordingly, you are required to have the information needed to prepare an analytical income statement for the company to be presented to the CEO. In a format that is acceptable for a meeting discussion with the CEO, you also need to prepare answers to the following problems:

[A] Determine the firm's break-even point in sales dollars?

[B] If sales should increase by 40%, by what percentage would EBT [earnings before taxes] & net income increase?

[C] Create another income statement, this time to confirm the calculations from part d.

Your firm needs to increase 10 million dollars. Suppose that flotation costs are expected to be 15 dollar per share, & that the market price of the stock is $120, how many shares would have to be issued? determine the dollar size of the issue?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918531

Have any Question? 


Related Questions in Basic Finance

Most languages are case sensitive so keywords can be

Most languages are case sensitive, so keywords can be written only one way, and the regular expressions describing their lexemes are very simple. However, some languages, like SQL, are case insensitive, so a keyword can ...

Dealer quotes a rate of 5 on this fra and the end user

Dealer quotes a rate of 5% on this FRA and the end user agrees. The expiration date is in 90 days. The notional amount is $3,000,000. The underlying interest is the 180 LIBOR time deposit. In 90 days the 180-day LIBOR is ...

Internationalization of human resources at obirenowned for

Internationalization of human resources at OBI Renowned for its orange big box stores, OBI is one of the leading DIY/home improvement retail brands in Europe. Founded in Germany in 1970, the company currently operates ab ...

1 what is the role of finance in a strategic plan2 what are

1) What is the role of finance in a strategic plan? 2) What are operating and financial plans? Please elaborate

Asset a will have a useful life of 9 years and cost 5m it

Asset A will have a useful life of 9 years and cost $5M; it will have installation costs of $750,000 and an estimated salvage or residual value $500,000. Asset B will have a useful life of 3 years and cost $2.5M; it will ...

Explain the difference between a short hedge and a long

Explain the difference between a short hedge and a long hedge ? a. What is the basis? b. How is the basis expected to change over the life of a futures contract? c. Explain why a strengthening basis benefits a short hedg ...

Why can forward rates be viewed as hedgeable rates consider

Why can forward rates be viewed as hedgeable rates? Consider the following yields to maturity: a. Graph the yield to maturity against the time to maturity. b. Is this yield curve consistent with any of the yield curve th ...

1 what are some impediments faced by communities wishing to

1. What are some impediments faced by communities wishing to perform hazard mitigation? 2. Name the primary federal mitigation programs, and explain how they serve to reduce hazard risk. 3. Do nonfederal mitigation progr ...

1 what are placebo effects and how can they be avoided2

1. What are placebo effects, and how can they be avoided? 2. What are demand characteristics, and how can they be avoided? 3. In what ways may experimenters unwittingly communicate their expectations to research particip ...

1 what is the connection between the truth-in-lending act

1. What is the connection between the Truth-in-Lending Act and the annual percentage rate (APR)? 2. What is the effective borrowing cost? 3. What is meant by a nominal rate of interest on a mortgage loan? 4. What is the ...

  • 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