Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Assignment 1

Managers should find out expected costs, expenditures, and revenues associated with company's assets in order to then make decisions about short and long-term uses of capital. Correct forecasting leads to maximized returns.

Estimate revenue, receivables, inventory, or payables of one your portfolio companies chosen. Find their financial data at http://finance.yahoo.com/compute a projection for next 12 months, and demonstrate your source data and calculations.

Assignment 2

1. Problem a: AFN equation Carter Corporation’s sales are expected to increase from $5 million in 2005 to $6 million in 2006, or by 20%. Its assets totalled $3 million at the end of 2005. Carter is at full capacity, so its assets should grow in proportion to projected sales. At the end of 2005, present liabilities are $1 million, consisting of $250 000 of accounts payable, $500 000 of notes payable, and  $250 000 of accrued liabilities. After-tax profit margin is forecasted to be 5%, and the forecasted retention ratio is 30%. Use AFN equation to forecast Carter’s extra funds essential for the coming year.

2. AFN equation Refer to Problem a, what will the extra funds required if company’s year-end 2005 assets had been $4 million? Suppose that all other numbers are same. Why is this AFN different from the one year you found in Problem a? Is the company’s “capital intensity” the same or different? Describe.

3. AFN equation Refer to Problem a, and suppose that company had $3 million in assets at the end of 2005. Though, now suppose that company pays no dividends. Under these assumptions, what will be the extra funds required for the coming year? Why is this AFN different from the one you found in problem a?

4. Problem: Pro-forma Income statement at the end of last year, Roberts Inc. reported following income statement (in millions of dollars):

     Sales                                                           $3,000
     Operating costs excluding depreciation               2,450
     EBITDA                                                         $   550
     Depreciation                                                     250
     EBIT                                                             $   300
     Interest                                                             125
     EBT                                                              $   175
     Taxes (40%)                                                      70
     Net Income                                                    $   105

Looking ahead to following year, company’s CFO has assembled the following:

• Year-end sales are expected to be 10% higher than the $3 billion in sales generated last year.

• Year-end operating costs, excluding depreciation, are expected to equal 80% of year-end sales.

• Depreciation is expected to increase at the similar rate as sales.

• Interest costs are expected to remain unchanged.

• The tax rate is expected to remain at 40%.

On the basis of this information, what would be forecast for Roberts’ year-end net income?

5. Problem: Exchange rate If British pounds sells for $1.50 (U.S) per pound, what must dollars sell for in pounds per dollar?

6. Problem: Currency appreciation assume that 1 Danish krone can be purchased in the foreign exchange market for the 14 U.S. cents today. If the krone appreciated 10% tomorrow against dollar, how many krones will a dollar buy tomorrow?

7. Problem: Purchasing power parity in the spot market 7.8 Mexican pesos could be exchanged for 1 U.S dollar. A compact disc costs $15 in the United States. If purchasing power parity (PPP) holds, what must be the price of same disc in Mexico?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91950

Have any Question? 


Related Questions in Basic Finance

1 explain the risk premium on a bond2 explain what is meant

1. Explain the risk premium on a bond. 2. Explain what is meant by the risk-return trade-off. 3. Explain how the yield curve can assist bond investors.

Apple inc is building a branch in vietnam the cost is 6

Apple Inc. is building a branch in Vietnam. The cost is 6 million VND. The company expects the VND cash flows for the next four years are 3 million VND, 5 million VND, 3 million VND, and 4 million VND, respectively. The ...

Name the two ways in which joints loaded in shear resist

Name the two ways in which joints loaded in shear resist loads ? Which kind is slip-critical? Which kind requires control of bolt preload during assembly? What are typical coefficients of friction for slip-critical joint ...

Grind co is considering replacing an existing machine the

Grind Co. is considering replacing an existing machine. The new machine is expected to reduce labor costs by $153,000 per year for 5 years. Depreciation on the new machine is $124,000 compared with $86,000 on the old mac ...

1 what is exchange-rate risk how can exchangerate risk be

1. What is exchange-rate risk? How can exchangerate risk be hedged using forward, futures, and options contracts? 2. How might an investor use forward, futures, and options contracts to speculate on the future value of a ...

Crypton electronics has a capital structure consisting of

Crypton Electronics has a capital structure consisting of 41% common stock and 59% debt. A debt issue of $100 0par value, 5.8% bonds that mature in 15years and pay annual interest will sell for $975. Common stock of the ...

Ethical dilemma- rita is the office manager of a

Ethical Dilemma:- Rita is the office manager of a three-doctor practice. Her brother, Juan, a recent college graduate, recently started working for a large insurance company that specializes in health insurance. In attem ...

How would a financial manager determine optimal capital

How would a financial manager determine optimal capital structure? How this would fit in with the company's capital expenditures, growth plans and operating results?

What is float what are its four basic components which of

What is float? What are its four basic components? Which of these components is the same from both a collection and a payment perspective? What is the difference between availability float and clearing float, and from wh ...

It is essential that you have a solid grounding in the

It is essential that you have a solid grounding in the academic theories of investing. In your final assignment, compare and contrast the academic theories of investing covered in your required readings with the philosop ...

  • 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