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- Newtown Propane currently has $645,000 in total assets and sales of $1,720,000. Half of Newtown’s total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by 22% in the next year. According to the AFN equation, the amount of additional assets required to support this level of sales is $ Newtown was using its fixed assets at only 95% of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets? $1,720,000 $1,629,473 $1,448,421 $1,810,526 When you consider that Newtown’s fixed assets were being underused, its target fixed assets to sales ratio should be %. When you consider that Newtown’s fixed assets were being underused, how much fixed assets must Newtown raise to support its expected sales for next year? $41,022 $46,150 $48,714 $51,278Last year Jain Technologies had $260 million of sales and $104 million of fixed assets, so its Fixed Assets/Sales ratio was 40%. However, its fixed assets were used at only 60% of capacity. Now the company is developing its financial forecast for the coming year. As part of that process, the company wants to set its target Fixed Assets/Sales ratio at the level, it would have had, had it been operating at full capacity. What target Fixed Assets/Sales ratio should the company set? a. 24.00% b. 19.35% c. 17.14% d. 31.58% e. 11.43%Last year, Jackson Tires reported net sales of $40,000,000 and total operating costs (including depreciation) of $26,000,000. Jackson Tires has $43,500,000 of investor-supplied capital, which has an after-tax cost of 7.5%. If Jackson Tires’s tax rate is 40%, how much value did its management create or lose for the firm during the year (rounded to the nearest whole dollar)? $22,837,500 $5,137,500 $20,737,500 $1,669,688
- Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Balance Sheet (in $ millions) Assets Liabilities and Stockholders' Equity Cash $ 15 Accounts payable $ 17 Accounts receivable 31 Accrued wages 3 Inventory 32 Accrued taxes 12 Current assets $ 78 Current liabilities $ 32 Fixed assets 46 Notes payable 15 Common stock 18 Retained earnings 59 Total assets $ 124 Total liabilities and stockholders' equity $ 124 Owen’s Electronics has an aftertax profit margin of 8 percent and a dividend payout ratio of 45 percent. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not round intermediate calculations. Enter…Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Balance Sheet(in $ millions) Assets Liabilities and Stockholders' Equity Cash $ 7 Accounts payable $ 20 Accounts receivable 25 Accrued wages 7 Inventory 28 Accrued taxes 13 Current assets $ 60 Current liabilities $ 40 Fixed assets 45 Notes payable 15 Common stock 20 Retained earnings 30 Total assets $ 105 Total liabilities and stockholders' equity $ 105 Owen’s Electronics has an aftertax profit margin of 10 percent and a dividend payout ratio of 45 percent. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to…Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Balance Sheet(in $ millions) Assets Liabilities and Stockholders' Equity Cash $ 8 Accounts payable $ 20 Accounts receivable 23 Accrued wages 4 Inventory 25 Accrued taxes 10 Current assets $ 56 Current liabilities $ 34 Fixed assets 44 Notes payable 14 Common stock 18 Retained earnings 34 Total assets $ 100 Total liabilities and stockholders' equity $ 100 Owen’s Electronics has an aftertax profit margin of 7 percent and a dividend payout ratio of 45 percent. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance…
- Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the company’s fixed assets are operating at 90% of capacity. a.What level of sales could Walter Industries have obtained if it had been operating at full capacity? b.What is Walter’s Target fixed assets/Sales ratio? c.If Walter’s sales increase 12%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio?Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the company’s fixed assets are operating at 90% of capacity. What level of sales could Walter Industries have obtained if it had been operating at full capacity? b.What is Walter’s Target fixed assets/Sales ratio? c.If Walter’s sales increase 12%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio?Buzzy Manufacturing Company has P2 billion in sales and P0.6 billion in fixed assets. Currently, the company’s fixed assets are operating at 80% of capacity. What level of sales could Buzzy have obtained if it have been operating at full capacity? What is Buzzy’s target fixed assets to sales ratio? If Buzzy’s sales increased by 30%, how large is the increase in fixed assets will the company need to meet its target fixed assets to sales?
- 1.) A firm has an average investment of $100,000 during the year. During the same period, the firm generates an after-tax income of $16,000. The cost of capital is 15 percent. what is the economic profit? Required: a.) Calculate the ROI and calculate the Economic Profit.Edmonds Industries is forecasting the following income statement: Sales $11,000,000 Operating costs excluding depreciation & amortization 6,050,000 EBITDA $4,950,000 Depreciation and amortization 660,000 EBIT $4,290,000 Interest 660,000 EBT $3,630,000 Taxes (40%) 1,452,000 Net income $2,178,000 The CEO would like to see higher sales and a forecasted net income of $3,312,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 8%. The tax rate, which is 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $3,312,000 in net income? (If necessary, round your answer to the nearest dollar at the end of the calculations.) The income statement is a company's financial statement that shows the firm's operating revenue and cost. It is used to present the operating…For 2018, Gourmet Kitchen Products reported $22 million of sales and $19 million of operating costs (including depreciation). The company has $15 million of total invested capital. Its after-tax cost of capital is 8% and its federal-plus-state income tax rate was 36%. What was the firm's economic value added (EVA), that is, how much value did management add to stockholders' wealth during 2018? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary.