Summary: Crumple Car Rentals

Mr. Shields’ should accept Mr. Fordham’s proposal in relation to the acquisition of Upstate Canning Company, Inc. In this case, Mr. Shields attempts to conclude if he should acquire the company from its owner, Mr. Fordham, using his personal savings of $35,000 in addition to an investment of $65,000 from his associates. Moreover, Mr. Fordham proposes that he will loan Mr. Shields’ $300,000 worth of income bonds, to be repaid in up to 10 years. Mr. Fordham provides Mr. Shields’ with a bond repayment schedule which allows Mr. Shields’ to repay the bonds at a discount if he meets the wishes to repay the bonds back early. Mr. Shields’ faces a

Jack Taylor began his business of Enterprise Rent-A-Car in 1962 in St. Louis, Missouri. Following the successfully philosophy of, "Take care of your customers and employees first, and profits will follow", Enterprise grew steadily to become the nation’s largest rent-a-car company. What separated Enterprise from its other competitors such as Hertz, Avis, and Alamo was the fact that the company focused on two segments of the home-city market rather than appealing to the airport-rental market.

Can obtaining a surety bond constitute negligence to provide financial responsibility under the New Mexico Mandatory Financial Responsibility Act section 66-5-218 (1988).

What are the advantages of leveraging this company? The disadvantages? How would leveraging up affect the company’s taxes? How would the capital markets react to a decision by the company to increase the use of debt in its capital structure?

9. What is the Cost of Debt, before and after taxes? Using the interest rate for the largest debt…cannot use the weighted interest rate for the debt since it includes capital lease obligations with no stated rate and could not find in the notes to the financials. 5.4% After tax cost is .054 x (1-.36) = 3.5%

27.1)Financing Statement C&H Trucking, Inc. (C&H), borrowed $19,747.56 from S&D Petroleum Company, Inc. (S&D). S&D hired Clifton M. Tamsett to prepare a security agreement naming C&H as the debtor and giving S&D a security interest in a new Mack truck. The security agreement prepared by Tamsett declared that the collateral also secured:

Commercial Capital Corporation is the leasing subsidiary of a major regional bank and offers a lease at 12.75 million per year for 4 years. The first payment is due upon delivery and installation. The rest of the payments are due each subsequent year at the beginning of the year. This cost includes the same service contract as what would have been obtained with purchase.

There are two chief participants in this case study, Paul Mackay and Jackie Patrick. Mackay, a sole proprietor of Lawsons (a general merchandising retail site in Riverdale, Ontario), has approached the Commercial Bank of Ontario in order to acquire an additional $194, 000 bank loan and a $26,000 line of Credit. Patrick, a first time loans officer, has been appointed to Mackay’s request. As such

When Miller considered Chang’s Clinic to be an opportunity, he desired to research the ability in obtain a loan so he could pursue the American dream. It is loyalty that keeps the dental business alive and growing and Despite Miller being the new guy telling clients to say ah, he anticipated he would grow substantially (50% of 04-05) within the first year. After reading this assumption it immediately told me he’s confident in obtaining the loyalty of Chang’s clients. I’m not a dentist, but I assumed this loyalty was imperative to survival and makes this business profitable. After reviewing the income statement and balance sheet provided, that was determined to be a fair assumption. Chang acquired this

9. Assuming that Santa Corporation was required to capitalize its operating lease how would the company’s

2. Forecast the firm’s financial statements for 2002 and 2003. What will be the external financing requirements of the firm in those years? Can the firm repay its loan within a reasonable period? In order to forecast the financial statements of 2002 and 2003, the following assumptions need to be made. The growth of sales is 15%, same as 2001, which is estimated by managers. The rate of production costs and expenses per sales is constant to 50%. Administration and selling expenses is the average of last 4 years. The depreciation is $7.8 million per year, which is calculated by $54.6 million divided by 7 years. Tax rate is 24.5%, which is provided. The dividend is $2 million per year only when the company makes profits. Therefore, we assume that there will be no dividend in 2003. Gross PPE will be $27.3 million (54.6/2) per year. We also assume there is no more long term debt, because any funds need in the case are short term debt, it keeps at $18.2 million. According to the forecast, Star River needs external financing approximately $94 million and $107 million in 2002 and 2003, respectively. In order to analysis if the company can repay the debt, we need to know the interest coverage ratio, current ratio and D/E ratio. The interest coverage ratios through the forecast were 1.23 and 0.87 respectively, which is the danger signal to the managers, because in 2003, the profits even not

1. Evaluate the terms of the proposed $900 million financing from the perspective of both parties. How would you calculate the return to investors in this transaction? If you need more information, what information do you need?

Chris Miller has been given an opportunity to take over an established dental clinic. The benefits of taking over this clinic is that he already has loyal customers and that there is only three clinics in the city. Miller has some major decisions that he needs to think about before he takes over this practice. He needs to decide how he will finance this purchase and how will he get the bank to give him a loan? Before we can even decide if he should go ahead with the purchase, we need to analyze three different scenarios of what can happen to the practice. We also need to make sure that Miller would be able to repay the loans as we are analyzing the different scenarios.

The company’s debt ratios are 54.5% in 1988, 58.69% in 1989, 62.7% in 1990, and 67.37% in 1991. What this means is that the company is increasing its financial risk by taking on more leverage. The company has been taking an extensive amount of purchasing over the past couple of years, which could be the reason as to why net income has not grown much beyond several thousands of dollars. One could argue that the company is trying to expand its inventory to help accumulate future sales. But another problem is that the company’s

With the three debt instruments in the case, hundreds of millions of dollars would become readily available to the company and be at their disposal. Each of the financing opportunities provides their own money in different forms. Great companies need these different financing ideas to