Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) At year-end 2013, Wallace Landscaping’s total assets were= $1.8 million and its accounts payable were= $350,000. Sales, which in 2013 were= $2.5 million, are expected to rise by 20% in 2014. Total assets and accounts payable are proportional to sales, and relationship will be sustained. Wallace typically utilizes no current liabilities other than accounts payable. Common stock amounted to $495,000 in 2013, and retained earnings were= $300,000. Wallace has arranged to sell= $105,000 of new common stock in 2014 to meet some of its financing requirements. Remainder of its financing needs will be met by issuing new long-term debt at the end of 2014. (As the debt is added at the ending of year, there will be no extra interest expense due to new debt.) Its profit margin on sales is 7%, and 40% of earnings will be paid out as dividends.

i) Compute Wallace's total long-term debt in 2013?

ii) Compute Wallace's total liabilities in 2013?

iii) How much new long-term debt financing will be needed in 2014? (Hint: AFN - New stock = New long-term debt.)

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914723

Have any Question? 


Related Questions in Basic Finance

Does depreciation affect cash flow in a positive or

Does depreciation affect cash flow in a positive or negative manner? From a net present-value perspective, why is accelerated depreciation preferable? Is it acceptable to utilize one depreciation method for tax purposes ...

1read the following article on dimensional fund

1. Read the following article on Dimensional Fund Advisors: http://www.wsj.com/articles/making-billions-with-one-belief-the-markets-cant-be-beat-1476989975 Write a composed essay (1 page max) addressing the following que ...

Explain how the repurchase agreement plays a role in the

Explain how the repurchase agreement plays a role in the pricing of futures contracts. What is the implied repo rate? Identify and explain some factors that make the execution of stock index futures arbitrage difficult i ...

What are examples of money market securities provide at

What are examples of money market securities? Provide at least four examples ? What is the difference between an exchange and an over-the-counter market? What are the three forms of market efficiency? What distinguishes ...

If the initial margin for one contract of crude oil was

If the initial margin for one contract of crude oil was $1,000 and the maintenance level was $800, how far would prices need to move against the position in order to trigger a margin call? (Assume only $1,000 on deposit. ...

1 when a longitudinal design reveals a change in behavior

1. When a longitudinal design reveals a change in behavior over time, why can we not conclude that the change is due to development? 2. What are generational effects, and why do they sometimes create a problem in cross-s ...

How do options on futures differ from options on the asset

How do options on futures differ from options on the asset underlying the futures? The open interest in a futures contract changes from day to day. Suppose that investors holding long positions are divided into two group ...

If a company has a degree of financial leverage of 20 what

If a company has a degree of financial leverage of 2.0, what is the expected effect of a 2% increase in operating earnings to the earnings to owners? How may using debt financing increase the governance of a company? Exp ...

The harvester collects 25 percent of sales in the month of

The Harvester collects 25 percent of sales in the month of sale, 60 percent of sales in the month following the month of sale, and 15 percent of sales in the second month following the month of sale. During the month of ...

What information can be identified in the statement of cash

What information can be identified in the statement of cash flows that cannot be found in the other statements?

  • 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