4. Engineers of a company have $8000 for using as principal (anapara) to invest, and there are 3options available. If d, dollars (in thousands) are invested in investment j, then a net presentvalue (in thousands) of ri(d)) is obtained, where the ri(d))'s are as follows:ri(di)=7d₁ + 2 (d₁20)r₂(d₂)=3d₂+7 (d₂ ≥ 0)ra(da)=4d3 +5 (d, ≥ 0)r₁(0)= r₂ (0) 3 (0) = 0=Engineers can only invest these options with the exact multiples of $1000 ($1000, $2000, $3000...)How can company engineers allocate $8000 to maximize the income from these investments?

We are given $8,000 to invest in three available options- R1, R2, & R3.The total amount…

Answered: Engineers of a company have $8000 for…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter2: Analysis Of Financial Statements

Section: Chapter Questions

Problem 10PROB

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The figures shown in the table below are an extract from the financial statements of Ridgeway (capital employed is $1.5m). $ Revenue 1,000,000 Cost of sales 400,000 Gross profit 600,000 Distribution expenses and administration cost 300,000 Profit before interest and tax 300,000 Finance cost 50,000 Profit before tax 250,000 Income tax expense 100,000 Profit after tax 150,000 What is the return on capital employed (ROCE)? A 7% B 10% C 40% D 20%
The firm earns 5% on current assets and 15% on fixed assets. The firm's current liabilities cost 7% to maintain and the average annual cost of long-term funds is 20 %. Calculate the firm's initial net working capital. Calculate the firm's initial ratio of current assets to total assets. Critically evaluate THREE (3) advantages of commercial paper that usually used by the largest and most credit-worthy companies.
PT. Sentosa Raya uses its own capital and debt capital. The agreed cost of debt is 10% and the interest to be paid on the debt is Rp. 3,000,000. The company earned an operating profit of Rp. 24,000,000 per year. The expected return is 30% per year. With these data, determine the value of the company and the company's cost of capital!
Please answer all. From a company we get the following:Capital employed 20,000,000 dollarDebt / equity ratio = 3Total income 40,000,000 dollarTotal profit 4,000,000 dollarInterest costs 1,500,000 dollarNet profit 2,500,000 dollara. Calculate the return on capital employed (Rsyss)b. Calculate the return on equity (Re)c. Show the relationship between profit margin and capital turnover rate and return on capital employedd. Demonstrate the relationship between the return on equity (Re) and the return on employed capital (Rsyss) with the help of the financial exchange!
Alex Morgan LLC's Chief Financial Officer, Mackenzie Dern, analyzed one of Morgan's competitors. She found that the competitor had Average Invested Capital of $600,000 in 2021. She said the Company had FCFF of $50,000; FCFE of $40,000; and that their WACC was 10.0%. She asked you what their EVA would be?
10. If the net income after tax of the company is P4,000,000, starting balance of assets is P500,000 and the ending balance of assets is P700,000, what is the return of assets? *a. 8b. 5.71c. 6.6667d. 3.3333 2. If the quick assets of the company amounted to P90,000, and the quick ratio is 9, how much is the current liabilities of the entity? *a. P810,000b. P89,997c. P90,009d. P10,000 7. If net sales amounted to P200,000, net income before tax is P80,000 and the income tax rate is 30%, how much is the profit margin ratio? *a. 0.40b. 0.28c. 2.5d. 3.57 8. Interest expense for the year amounted to P90,000. Income tax expense is P100,000. If net income after tax is P620,000, what is the times interest earned ratio? *a. 6.2b. 9c. 6.888d. P720,000 1. If current assets amounted to P600,000 and current liabilities amounted to P200,000, what is the current ratio of the entity? *a. P800,000b. P400,000c. 3d. 1/3 3. If net sales is P200,000 and the average accounts receivable is P50,000, what is…
TBA Corporation announced that its cash flows from operations is $5 million. It also presents that the capital expenditure amounts to $1 million and they acquired additional debt amounting to $1,500,000. The FCFE of the firm would be? Use #1. The FCFE is expected to grow by 4%. Assume that the required rate of return of the shareholders is 12%, the value of equity would be? TQC Corporation announced that its cash flows from operations is $3 million. It also presents that the capital expenditure amounts to $800,000 and they issued new debts amounting to $1,000,000. The FCFE of the firm would be? Use #3. The FCFE is expected to grow by 5%. Assume that the required rate of return of the shareholders is 15%, the value of equity would be? Use #4. The market value of the firm’s preferred equity is $1 million. If the firm has 500,000 common shares outstanding, the value per share would be? (Hint: Deduct market value of preferred equity from the value of equity).
Roman holidays inc had operating income of $40 million on a a start of the year total capitalization of $200 million. It’s cost of capital was 11.5%. What was the EVA?
Bulldogs Inc. has a total asset and total sales of P1,500,000 and P4,500,000, respectively. If the net income of the firm is only 4% of the sales revenue, what is the return on asset? A. 1.33% B. 24% C. 4% D. 12%
TMR Corporation announced that its cash flows from operations is $3,000,000. It also presents that the capital expenditure amounts to $800,000 and they issued new debts amounting to $1 million. The FCFE of the firm would be? Use #1. The FCFE is expected to grow by 5%. Assume that the required rate of return of the shareholders is 15%, the value of equity would be? Use #2. The market value of the firm’s preferred equity is $1 million. If the firm has 500,000 common shares outstanding, the value per share would be?
Q2. A company wants to get its working capital calculated by you. You are given the following estimates for the year 2020. In addition to that add 10 percent to your figures for contingencies. Calculate the Net Working Capital for the year 2020.Assets and Liabilities Estimated Amount for 2020Miscellaneous Expenses (1 month )1200Stocks of finished goods 8000Stock of work in progress 7500 Rents -- 6 months 1800Stocks of raw materials 5000Average credit givenInland sales -- ( 3 weeks credits ) 5000Export Sales (1.5 weeks credit ) 2500Wages (1.5 weeks ) 1500Creditors (1.5 months )1000Salaries ( 0.5 month )4000Payment in advanceSundry Expenses 1000
If current assets are $100,000 and current liabilities are $42,000, what is the working capital? A. 200 percent B. 50 percent C. 2.0 D. $58,000

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