Income from a precious metals mining operation has been decreasing uniformly for 5 years. If income in year 1 was $300,000 and it decreased by $30,000 per year through year 4, the annual worth of the income at 10% per year is closest to: (Hint: Use AT=AA-AG Equation and Arithmetic Gradient) O $203,900 O $310,500 O$164,800 $258,600
Q: At the end of last year, Roberts Inc. reported the followingincome statement (in millions of…
A: Computation:
Q: A. Complete the Year 2 income statement data for Green Caterpillar, then answer the questions that…
A:
Q: Company DotThrive reported the following financial results. Operating income is $61.32 million and…
A: Free cash flows are the cash that is available for the company to pay off the debts or payment of…
Q: A company is planning to invest $75,000 (before taxes) in a personnel training program. The $75,000…
A: Net Present Value= Present Value less Initial Outflow
Q: Strickler Technology is considering changes in its working capital policies to improve its cash flow…
A: given data sales = 3,250,000 net profit margin = 7% sales outsanding = 41 days inventory turn over…
Q: Solano Company has sales of $520,000, cost of goods
A: Return on Investment Return on investment (ROI) is a financial ratio used to calculate the benefit…
Q: Strickler Technology is considering changes in its working capital policies to improve its cash…
A: Cash conversion cycle: It is a cycle that shows times (in days) taken by the firm to convert its…
Q: The following tables contain financial statements for Dynastatics Corporation. Although the company…
A: Workings:
Q: Larger Company had originally expected to earn operating income of Php130,000 in the coming year.…
A: Given: Operating income = Php 130,000 Degree of operating leverage = 2.4 Sales growth = 20%
Q: Austin Grocers recently reported the following 2008 income statement (in millions of dollars): Sales…
A: 2008 sales = $700 Increase in sales in 2009 = 25% Operating cost including depreciation in 2009 =…
Q: What is the net cash flow in Year 2?
A: Net Cash Flow: It represents the difference between a firm's cash inflow and cash outflow for a…
Q: The following tables contain financial statements for Dynastatics Corporation. Although the company…
A: Net fixed assets grow by $200, which is 25% of the current value of $800. Therefore, for the…
Q: Bennett Industries invested $10,000,000 in a coventure one year ago. One year later, Bennett…
A: The calculation method where interest on interest is charged is known as Compound Interest. It is…
Q: The following tables contain financial statements for Dynastatics Corporation. Although the company…
A: Debt ratio: It is the solvency ratio that shows the ability of the company to pay off its…
Q: The company earned a revenue of Php 70,500 at the end of the third year but then decreases…
A: Here, Revenue Earned at the end of 3rd year is Php 70,500 % of the decrease in revenue per year is…
Q: A company's invested capital is $13,000,000 and management has determined that the target rate of…
A: Operating income: A company's operating income is the amount of profit it makes after subtracting…
Q: At the end of last year, Ralph Inc. reported the following income statement (in millions of…
A: Formulas:
Q: Required: a1. Produce an income statement for 2020. Assume that net working capital will equal 50%…
A: Information Provided: Increase in net fixed assets = $200,000 Revenues to Total assets = 1.50 Annual…
Q: tart year. Neptune Corporation had sales of $654.000 and paid taxes of $71000. Because of the low…
A: Operating leverage seems to be a cost-accounting method that determines how much a company or…
Q: Last year sales were $300,000, net operating income was $75,000, and averageoperating assets were…
A: Last year expenses = Sales - Net operating income = $300,000 - $75,000 = $225,000
Q: Strickler Technology is considering changes in its working capital policiesto improve its cash flow…
A: cash conversion cycle
Q: asing exponentially in 5 years. Based on the industry, this increase in revenue has an applicable…
A:
Q: The following tables contain financial statements for Dynastatics Corporation. Although the company…
A: Assets= net working capital+fixed assets Liabilities=debt+equity
Q: An investment services company experienced dramatic growth in the last two decades. The following…
A: The revenue function represents the revenue to be generated by the firm after a time 't' while the…
Q: Strickler Technology is considering changes in its working capital policies to improve its cash flow…
A: The cash conversion cycle (CCC) is one of several measures of management effectiveness. It measures…
Q: The Prentice Paint Company earned a Net Profit margin of 20% on revenues of $20million this year.…
A: Solution :. (Amounts in $ million) Revenue. 20.00 Net…
Q: At the end of last year, Edwin Inc. reported the following income statement (in millions of…
A: EBITDA = Net income + taxes + interest expense + depreciation & amortization.
Q: Income from a precious metals mining operation has been decreasing uniformly for 5 years. If income…
A: In general mining is process of obtaining or in simple words extracting valuable resources from…
Q: Canyon Tours showed the following components of working capital last year: Beginning of…
A: Working capital refers to the amount that a company needs to meet the operating expenses. Working…
Q: A company has profits of $38,982 this year and expects profits to decrease by $1,728 dollars per…
A: Given: Profit = $38,982 Decrease in profit = $1,728 Year = 12 APR = 6.2%
Q: Last year, Hassan’s Madhatter, Inc. had an ROA of 5.8 percent, a profit margin of 18.50 percent, and…
A: Basic FrameworkROA = Net income / Total assets = Sales x Profit Margin / Total AssetsHence, Total…
Q: The company paid dividends of $407,440 last year. The "Investment in Buisson, S.A.," on the balance…
A: 1. AVERAGE OPERATING ASSETS : = ( BEGINNING TOTAL OPERATING ASSET + ENDING TOTAL OPERATING ASSET )…
Q: The following tables contain financial statements for Dynastatics Corporation. Although the company…
A: Solution Balance sheet is a statement of business assets , liabilities and owners equity as of any…
Q: a) Compute the free cash flows for the next 5 years. b) Compute the terminal value at the end of…
A: Free cash flow (FCF) to equity refers to the amount of income/profit generated during the period…
Q: During the current year, Sokowski Manufacturing earned income of $206,500 from total sales of…
A: Asset turnover = Sales / Average capital assets ROI = Margin * Turnover
Q: A company expects their revenues to decrease by $14,587 over the next 8 years, starting from year 2.…
A: Discounting is a technique to compute the present value (PV) of future cashflows by using an…
Q: The following tables contain financial statements for Dynastatics Corporation. Although the company…
A: Financial Statements:- These are statements prepared by the company in order to know its financial…
Q: The production manager of a manufacturing firm has tracked the average repair and maintenance cost…
A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…
Q: NMTeX Oil owns several gas wells in Carlsbad, NM. Revenue from the wells has been increasing…
A: When the cash flow increases or decreases by the same amount each period, it is called as arithmetic…
Q: Canyon Tours showed the following components of working capital last year: Beginning of Year…
A: a) Computation of changes in net working capital is as follows:
Q: Revenue from gas wells that have been in production for at least 5 years tends to follow a…
A: RequiredCompute the value of all the royalties received at the end of year 14. Assumption: It is…
Q: Sales for Hanebury Corporation’s just-ended year were $12 million. Sales were $6 million 5 years…
A: The sales of the firm grow over a period of time when it gains reputation and starts serving more…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers sales last year were 3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was 1,800,000. The firm had fixed assets totaling 535,000. Stricklers payables deferral period is 45 days. a. Calculate Stricklers cash conversion cycle. b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Stricklers managers believe the annual inventory turnover can be raised to 9 times without affecting sale or profit margins. What would Stricklers cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9 for the year?At the end of last year, Roberts Inc. reported the followingincome statement (in millions of dollars): Looking ahead to the following year, the company’s CFO has assembled this information:● Year-end sales are expected to be 10% higher than the $3 billion in sales generatedlast year.● Year-end operating costs, excluding depreciation, are expected to equal 80% of yearendsales.● Depreciation is expected to increase at the same rate as sales.● Interest costs are expected to remain unchanged.● The tax rate is expected to remain at 40%.On the basis of that information, what will be the forecast for Roberts’ year-end net income?The Prentice Paint Company earned a Net Profit margin of 20% on revenues of $20million this year. Fixed Capital Investment was $2 million and the depreciation was $3 million. Working capital investment equals 7.5% of the sales level in that year. Net Income, Fixed Capital Investment, depreciation, interest expense, and sales are expected are expected to grow at 10% per year for the next 5 years. After 5 years, the growth rate in sales, net income, and interest expense will decline to a stable 5% per year, and fixed capital investment and depreciation will offset each other. The tax rate is 40%, it has 1 million shares of common stock outstanding, and has long-term debt paying 12.5% interest trading at its par value of $32 million. Calculate the value of the firm and its equity using the FCFF model if the WACC is 17% during the high growth stage and 15% during the stable stage.
- You have looked at the current financial statements for Reigle Homes, Co. The company has an EBIT of $2,850,000 this year. Depreciation, the increase in net working capital, and capital spending were $225,000, $90,000, and $415,000, respectively. You expect that over the next five years, EBIT will grow at 16 percent per year, depreciation and capital spending will grow at 21 percent per year, and NWC will grow at 11 percent per year. The company has $15,100,000 in debt and 345,000 shares outstanding. You believe that sales in five years will be $22,600,000 and the price-sales ratio will be 2.4. The company’s WACC is 8.5 percent and the tax rate is 21 percent. What is the price per share of the company's stock?Last year sales were $300,000, net operating income was $75,000, and averageoperating assets were $500,000. If sales next year remain the same as last year andexpenses and average operating assets are reduced by 5%, what will be the return oninvestment next year?a. 12.2%b. 18.2%c. 20.2%d. 25.2%You have looked at the current financial statements for J&R Homes, Company. The company has an EBIT of $4,350,000 this year. Depreciation, the increase in net working capital, and capital spending were $300,000, $148,000, and $550,000, respectively. You expect that over the next five years, EBIT will grow at 15 percent per year, depreciation and capital spending will grow at 20 per year, and NWC will grow at 10 per year. The company has $25,000,000 in debt and 455,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.55 percent, indefinitely. The company’s WACC is 9.6 percent and the tax rate is 21 percent. What is the price per share of the company's stock? PLEASE NEED THIS ASAP
- You have looked at the current financial statements for J&R Homes, Company. The company has an EBIT of $3,110,000 this year. Depreciation, the increase in net working capital, and capital spending were $238,000, $103,000, and $480,000, respectively. You expect that over the next five years, EBIT will grow at 19 percent per year, depreciation and capital spending will grow at 24 percent per year, and NWC will grow at 14 percent per year. The company currently has $17.7 million in debt and 370,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3 percent indefinitely. The company’s WACC is 8.5 percent and the tax rate is 24 percent. What is the price per share of the company's stock?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.The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $270,000 per year for the next 4 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 20% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $70 and variable costs at 70% of revenue. The company’s policy is to pay out one-half of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 70 Variable costs (70% of revenue) 1,260 Depreciation 216 Interest (6% of beginning-of-year debt) 18 Taxable income 236 Taxes (at 35%) 83 Net income $ 153 Dividends $ 77 Addition to retained…
- The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $270,000 per year for the next 4 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 20% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $70 and variable costs at 70% of revenue. The company’s policy is to pay out one-half of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 70 Variable costs (70% of revenue) 1,260 Depreciation 216 Interest (6% of beginning-of-year debt) 18 Taxable income 236 Taxes (at 35%) 83 Net income $ 153 Dividends $ 77 Addition to retained…NMTeX Oil owns several gas wells in Carlsbad, NM. Revenue from the wells has been increasing according to an arithmetic gradient for the past 5 years. The revenue in year 1 from well no. 24 was $390,000 and it increased by $15,000 each year thereafter. Determine (a) the revenue in year 3, and (b) the equivalent annual worth of the revenue through year 5. Assume an interest rate of 10% per year.The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $240,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $64 and variable costs at 80% of revenue. The company’s policy is to pay out two-thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2019(Figures in $ thousands) Revenue $ 1,800 Fixed costs 64 Variable costs (80% of revenue) 1,440 Depreciation 96 Interest (8% of beginning-of-year debt) 24 Taxable income 176 Taxes (at 40%) 70 Net income $ 106 Dividends $ 71 Addition to…