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- Consider the following scenario: Cute Camel Woodcraft Company’s income statement reports data for its first year of operation. The firm’s CEO would like sales to increase by 25% next year. 1. Cute Camel is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company’s operating costs (excluding depreciation and amortization) remain at 65% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company’s tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cute Camel expects to pay $100,000 and $1,773,844 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Cute Camel, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Need help with Year 2 values and questions at bottomYou are given the following information about a firm: Cost of equity is 10% Cash flow to equity in the prior year is $4 million Cash flow to equity in the prior year is projected to grow 11% in the current year and then at a constant 5% annual rate thereafter. What is the value of equity of the firm?Investment and profit of a company were accordingly 250 000 and 1 000 000 in the last year. Find the Return on Equity, if the dividends of a company grew to 5%?
- The Balance Sheet abstract of a Company for two years are given below. You are required to – 1. Calculate, for the last year Debt-Equity Ratio, Quick Ratio, and Working Capital Turnover Ratio; and 2. Sales Volume required to maintain the same Working Capital Turnover Ratio in last year.What was the growth rate in Net Income over the previous 5 year period if the company's profits grew from $1.50 per share to $2.26 per share?Which of the following is the best example of a well-stated financial objective? A) Increase market share by 3% annually for the next 3 years. B) Gradually boost market share from 10% to 15% over the next several years. C) Boost revenues by a percentage greater than the industry average. D) Achieve lower costs than any other industry competitor. E) Increase earnings per share by 15% annually.
- Karen Lamont is in the process of starting a new business and wants to forecast the first year's income statement and balance sheet. She has made several assumptions, which are shown below: Lamont has projected the firm's sales will be $1 million in the first year. She believes that the operating and gross profit margins will be 20 percent and 50 percent, respectively. For working capital, Lamont has estimated the following: Accounts receivable as a percentage of sales: 12% Inventory as a percentage of sales: 15% Accounts payable as a percentage of sales: 7% Accruals as a percentage of sales: 5% A bank has agreed to loan her $300,000, consisting of $100,000 in short-term debt and $200,000 in long-term debt. Both loans will have an 8 percent interest rate. The firm's tax rate will be 30 percent. Lamont will need to purchase $350,000 in plant and equipment. Lamont will provide any other financing needed.Based on Lamont's assumptions in Situation 3, prepare a pro forma income…Cold Goose Metal Works Inc.’s income statement reports data for its first year of operation. The firm’s CEO would like sales to increase by 25% next year. 1. Cold Goose is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company’s operating costs (excluding depreciation and amortization) remain at 70% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company’s tax rate remains constant at 25% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cold Goose expects to pay $200,000 and $1,922,063 of preferred and common stock dividends, respectively. Complete the Year 2 income statement data for Cold Goose, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar. Cold Goose Metal Works Inc. Income Statement for Year Ending December 31…Jasmine Manufacturing wishes to maintain a sustainable growth rate of 10.25 percent a year, a debt-equity ratio of .46, and a dividend payout ratio of 29.5 percent. The ratio of total assets to sales is constant at 1.29. What profit margin must the firm achieve?
- Cold Goose Metal Works Inc.’s income statement reports data for its first year of operation. The firm’s CEO would like sales to increase by 25% next year. 1. Cold Goose is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT). 2. The company’s operating costs (excluding depreciation and amortization) remain at 70.00% of net sales, and its depreciation and amortization expenses remain constant from year to year. 3. The company’s tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT). 4. In Year 2, Cold Goose expects to pay $100,000 and $1,195,950 of preferred and common stock dividends, respectively.What is the projected level of revenue in 3 years for a company with current revenues of $48.25 million if estimated growth under continuous compounding is 8.6 percent?Mr. Parvez invested Tk. 2850 in a startup. The business increased in value by 4% in the first year, decreased by 2% in the second year, and continued to increase by 7% from the third year onward. a) What was the average growth rate of the startup over the first 3 years? b) What will be the value of Mr. Parvez’s investment after 6 years?
