1) XYZ Corporation has projected sales of= $65,000 in January, $76,000 in February, and $84,000 in March. November’s sales were= $68,000, and December’s sales were= $72,000. XYZ’s makes 60% of their sales on credit. Of these credit sales, 70% is gathered in one month, and 27% in 2 months. Purchases average= 65% of sales. Purchases are made on credit and paid in following month. Wages and overhead are= $7,000 a month. If firm has the cash balance of= $122,000 at commencement of January, compute its cash balance be in March?
2) The acquiring firm is eager to pay the 25% premium for target firm's shares, presently selling at $20 per share. Target has 1 million shares outstanding, present assets of= $5 million, fixed assets of= $40 million, and liabilities of= $20 million. Amount of goodwill involved in this transaction is:
e) none of the above
3) Describe how dual-class recapitalization could be used in the restructuring to keep control of firm in the narrow set of hands. Why might shareholders holding lesser control be eager to accept these dual class shares?