Based on Jim's expectation of 10.1% sales growth and payout ratio of 88.96% of net income next year, Jim developed the pro forma financial statements given below. What will be the amount of net new financing needed for Jim's Espresso? Click the icon to view the pro forma financial statements.
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Sales are $221466 please dont do handwritten at all. Solve or you may also use excel .
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- For the next fiscal year, you forecast net income of $52,000 and ending assets of $503,400. Your firm's payout ratio is 9.5%. Your beginning stockholders' equity is $295,400, and your beginning total liabilities are $119,200. Your non-debt liabilities, such as accounts payable, are forecasted to increase by $10,300. What will be your net new financing needed for next year?Pearson International Publishing Company is trying to decide whether torevise its popular textbook, Fundamental of Corporate Finance. The companyhas estimated that the revision will cost RM65,000. Cash flows for the firstyear is RM18,000 and it will increase by 4 percent per year. The book will berevised back after five years. The initial costs are paid now, and revenues arereceived at the end of each year. If the company requires a 10 percent returnfor the investment, should it undertake the revision.The following information is available for a company. Set up the income statement and balance sheet for 2008, then forecast the income statement and balance sheet for 2009, assuming sales grow by 15% During 2008 the company is going to buy a $300,000 machine, depreciated SL over 6 years. It will do its financing for next year using bonds that have a coupon rate of 8%. It pays off $100,000 a year on its long term debt. 2008 2009 Additional Financing Necessary Dividends (30% payout) Taxable Income Depreciation $50,000 Cash $175,000 Accruals $50,000 Raw material $400,000 Curr. Assets LTD at 10% $600,000 Labor $312,500 Accum. Depr. $475,000 ST portion of LTD $100,000 A/P $50,000 TL & NW Operating Costs $125,000 A/R $275,000 Curr. Liab. GFA $1,550,000 Sales…
- To estimate Missed Places Inc.'s (MP) external financing needs, the CFO needs to figure out how much equity her firm will have at the end of next year. At the end of the most recent fiscal year, MP's retained earnings were $158,000. The Controller has estimated that over the next year, gross profits will be $360,700, earnings after tax will total $21,400, and MP will pay $12,400 in dividends. What are the estimated retained earnings at the end of next year? (Please show work and explain) Intellus has long-term debt of $5 million, owners' equity of $7.75 million, current assets of $1 million, gross fixed assets of $20 million, and accumulated depreciation of $7 million. What is the firm’s net working capital? (Please show work and explain)As the CFO of Regency Health Care, one of Allison's primary responsibilities is to set the hurdle rate to use in evaluating future projects. Her approach is to set the hurdle rate at 12% more than the company's cost of capital, rounded to the next whole number. For the next year, she projects that the company's capital will be 60% debt with an overall interest rate of 4.25%, net of taxes. She knows that the private equity company that owns most of Regency's stock expects a return of 22% on its investment. With this information irfmind, Allison decides that next year's hurdle rate will beUse the percentage of sales forecasting method to compute the additional financing needed by Lambrechts Specialty Shops, Inc. (LSS), if sales are expected to increase from a current level of $20 million to a new level of $25 million over the coming year. LSS expects earnings after taxes to equal $1 million over the next year. LSS intends to pay a $300,000 dividend next year. The current year balance sheet for LSS is as follows: Lambrechts Specialty Shops, Inc. Balance Sheet as of December 31, 20X3 Cash $1,000,000 Accounts payable $3,000,000 Accounts receivable 1,500,000 Notes payable 3,000,000 inventories 6,000,000 Long-term debt 2,000,000 Net fixed assets 3,000,000 Stockholders’ equity 3,500,000 Total Assets $11,500,000 Total…
- Use the percentage of sales forecasting method to compute the additional financing needed by Lambrechts Specialty Shops, Inc. (LSS), if sales are expected to increase from a current level of $20 million to a new level of $25 million over the coming year. LSS expects earnings after taxes to equal $1 million over the next year. LSS intends to pay a $300,000 dividend next year. The current year balance sheet for LSS is as follows: Lambrechts Specialty Shops, Inc. Balance Sheet as of December 31, 20X3 Cash $1,000,000 Accounts Payable $3,000,000 Accounts Receivable 1,500,000 Notes Payable 3,000,000 Inventories 6,000,000 Long-Term Debt 2,000,000 Net Fixed Assets 3,000,000 Stockholders’ Equity 3,500,00 Total Assets $11,500,000 Total Liabilities and Equity $11,500,000Noah’s ark video game expects sales to grow by 25% next year. Assume that it pays out 95% of its net income. Using the following statements and the percent of sales method, forecast the amount of net new financing needed.Biochemical Corporation requires $650,000 in financing over the next three years. The firm can borrow the funds for three years at 12.60 percent interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 9.25 percent interest in the first year, 13.50 percent interest in the second year, and 10.50 percent interest in the third year. Assume interest is paid in full at the end of each year. Determine the total interest cost under each plan. Interest Cost Long-term cost-fixed rated Short-term variable-rate
- Puckett Products is planning for $3 million in capital expenditures next year. Puckett's target capital structure consists of 60% debt and 40% equity. If net income next year is $2 million and Puckett follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio? Round your answer to two decimal places.Give correct typing answer with explanation and conclusion to all parts Biochemical Corp. requires $540,000 in financing over the next three years. The firm can borrow the funds for three years at 11.80 percent interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 8.50 percent interest in the first year, 12.90 percent interest in the second year, and 9.75 percent interest in the third year. Assume interest is paid in full at the end of each year. a. Determine the total interest cost under each plan. Long-tern fixed rate-Interest cost Short-term variable rate-Interest cost b. Which plan is less costly? multiple choice Short-term variable-rate plan Long-term fixed-rate planAs the chief financial officer of Adirondack Designs, you have the following information: Next year’s expected net income after tax but before new financing $ 51 million Sinking-fund payments due next year on the existing debt $ 26 million Interest due next year on the existing debt $ 21 million Common stock price, per share $ 33.5 Common shares outstanding 31 million Company tax rate 35% Calculate Adirondack’s times-interest-earned ratio for next year assuming the firm raises $61 million of new debt at an interest rate of 2 percent. Calculate Adirondack’s times-burden-covered ratio for next year assuming annual sinking-fund payments on the new debt will equal $3.0 million. Calculate next year’s earnings per share assuming Adirondack raises the $61 million of new debt. Calculate next year’s times-interest-earned ratio, times-burden-covered ratio, and earnings per share if Adirondack sells 2.6 million new shares at $22 a share instead of raising new debt.