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 which of the gaps in figure do you think represents the

1. Which of the gaps in Figure do you think represents the major problem for most firms? How can a company attempt to eliminate the knowledge gap? The communications gap? 2. Compare and contrast the customer service, cus ...

Briefly explain in which of the following situations moral

Briefly explain in which of the following situations moral hazard is likely to be less of a problem. a. A manager is paid a flat salary of $150,000. b. A manager is paid a salary of $75,00 plus 10% of the firm's profits.

1 discuss uncertainty as it relates to the overall

1. Discuss uncertainty as it relates to the overall logistical performance cycle. Discuss and illustrate how performance cycle variance can be controlled. 2. What is the logic of designing echeloned logistical structures ...

A company exports 37000 products to chile nbspunder an

A company exports 37,000 products to Chile  under an import license that expires in five years. In Chile, the products are sold for the Chile peso equivalent of $45. Direct shipping costs in the United States and indirec ...

1 describe why teams are being formed more frequently in

1. Describe why teams are being formed more frequently in business today. What are some of the special considerations required for a team to be successful? 2. Defend a position on the following question: Does radical org ...

According to an article in the wall street journal in late

According to an article in the Wall Street Journal, in late 2009, "Between Dec. 9 and 11, some big European and U.S. banks made bearish calls on the euro by buying one-year euro ‘puts.'" a. What is a "bearish call"? b. W ...

Part 1 short questions a short precise and concise answer

Part 1: Short questions. A short, precise and concise answer will obtain full credit. (NB: We will take the seven highest grades of your answers to these eight questions.) Question 1 A treasurer argues with the CFO that ...

1 define the following termsa optionb callc putd contingent

1. Define the following terms: a. Option b. Call c. Put d. Contingent claim 2. What are the similarities and differences between options and warrants? 3. What variables are important in determining call option prices? 4. ...

1 what is the difference between global remuneration and

1. What is the difference between global remuneration and international assignment compensation? 2. What are the major issues related to the effectiveness of global remuneration plans? 3. How are equity compensation plan ...

One bond has 9 years until maturity and a coupon of 42 the

One bond has 9 years until maturity and a coupon of 4.2%. The coupon is paid semiannually. If the YTM is 6%, what is the value of this bond? There is another bond with 15 year to maturity with a coupon rate of 6%. This c ...

  • 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