Liquity Rate A firm used 1 million in cash to puchase inventory. Will its current ratio rise or fall? Will its quick ratio rise or fall? Please cplain both.
Q: Consider the following scenario: Rate of Return Scenario Prob. Stocks Bonds Recession .2...
A: The question is based on the concept to calculate expected return and risk in given probabilistic si...
Q: Peterson Soft Drink Corp. imports fruit flavors for use in its products. The company pays $0.86 per ...
A: Answer: The correct option is D. (Specific tariff) Meaning of tariff: Tariff is nothing but tax paid...
Q: Plank’s Plants had net income of $10,000 on sales of $100,000 last year. The firm paid a dividend of...
A: Given information in question :- Company net income =$10,000 Company sales =$10...
Q: Firms manage a variety of current assets. Permanent current assets are needed for the firm to mainta...
A: Explanation: Matching principle states that the firm should finance its current assets with short-te...
Q: What is the value of zero-coupon bond with a par value of $1,000 and a yield to maturity of 5.90%? T...
A: Par value of Bond = 1000 Yield to maturity = 5.90% Bond maturity in years = 7
Q: Small Fry, Inc. plans to re-invest all of its earnings to expand its operations. Dividends were $2.0...
A: Therefore, the stock price today is $20.85.
Q: As a finance intern at Pork Products, Jennifer Wainwright’s assignment is to come up with fresh insi...
A: The question is based on the concept of APT (Arbitrage pricing Theory), the theory explains the risk...
Q: Walsh Company is considering three independent projects, each of which requires a $3 million investm...
A: As per the capital budgeting decision rules: If the cost of equity is less than the internal rate o...
Q: One year T-bills yield 2.50%. Based on futures rates, the market expects that one year from now, new...
A: The pure expectation explains the yield curve in terms of the expected short term rates.
Q: 1. you want to buy a $250,000 house and you will use a conventional mortgage. What is the minimum do...
A: We will answer the first question since the exact one was not specified. Please submit a new questio...
Q: 11-2 What is the expected return of the following investment? Expected Return Probability Payoff 30....
A: Expected return of an investment is calculated as below: Please refer to the excel:
Q: The Options Clearing Corporation is responsible for all of the following EXCEPT: A standardizatio...
A: Options Clearing Corporation is an issuer and guarantor of the listed option (derivatives) contracts...
Q: 4. Financial Break-Even Ayden's Toys, Inc., purchased a $435,000 machine to produce toy cars. The ma...
A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,...
Q: Determine the value at the end of three years of a $10,000 investment (today) in a bank certificate ...
A: Excel Spreadsheet:
Q: 3.1 Problem 3: You have access to two investment opportunities. Mutual Fund A, which promises 20% ...
A: Let the weight of investment in mutual fund A be “ wA” and in mutual fund B be “wB” or “(1-wA)”. Ex...
Q: Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your...
A: a. The calculation of the rate of return after one year in a short position is as follows: The fo...
Q: Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce Lawy...
A: Hi there, Thanks for posting the question. But as per our honor code, we should answer the first que...
Q: Using cash discount using EOM in business math with freight. Logan Company received from Furniture.c...
A: Given that Logan received invoice dated September 29 from Furniture.com, and the terms were 1/10 EOM...
Q: Consider the case of Hungry Whale Electronics Company: Hungry Whale Electronics Company is a mature...
A: Inventory Conversion Period: Average Collection Period: Payables Deferral Period: Cash Conversion...
Q: [EXCEL] Zero coupon bonds: Northrop Real Estate Company management is planning to fund a development...
A: The question is based on the concept to calculate market value of a bond, using following function i...
Q: Bond prices change whenever the market interest rate changes. In general, short-term interest rates ...
A: Bonds are debts instruments, there can be coupon bonds (that pays a fixed amount as interest for a s...
Q: what is risk and return in the context of financial decision making?
A: Risk and return are two very important concept used in any financial decision making. Two financial ...
Q: 5. Option to Wait Your company is deciding whether to invest in a new machine. The new machine will ...
A: Investment starts in 1st year: NPV when initial investment is $2,800,000: The calculation of the N...
Q: Microbiotics currently sells all of its frozen dinners cash-on-delivery but believes it can increase...
A:
Q: calculate annual cash flow of $250000 invested at 6%
A:
Q: Here is some price information on FinCorp stock. Suppose that FinCorp trades in a dealer market.Bid ...
A: Bid price refers to the maximum price offered by a buyer for a security and ask price refers to the ...
Q: A firms bonds have a maturity of 10 years with a $1000 face value, have an 8% coupon rate paid semia...
A: Yield to call refers to the expected return on a bond when the bond is held until its call date (tha...
Q: Your grandfather wants to establish a scholarship in his father’s name at a local university and has...
A: The question is based on the concept of present value of perpetual fixed income. The present value o...
Q: A career counselor decides to make monthly payments of $150 on credit card debt of $3489.64 and disc...
A: The formula to calculate number of months is given below:
Q: Wilson is now evaluating the expected performance of two common stocks, Furhman Labs Inc. and Garten...
A: The question is based on the concept of capital asset pricing model (CAPM) , the model used to calcu...
Q: How to analyze capital budgeting decisions? Which measures are important and why?
A: Capital Budgeting process involve analyzing the cash in flow and outflow of a project, to determine ...
Q: Your friend from Netherlands is planning to visit you in the United States. You estimate the cost of...
A: Solution:
Q: ABC currently produces annual free cash flows of 5 billion a year. The company has long-term debt of...
A: Enterprise value of a firm is calculated as Equity value plus debt minus cash as follows: Present v...
Q: 1. Sensitivity Analysis and Break-Even Point We are evaluating a project that costs $604,000, has an...
A: A project that costs $604,000 and having an 8 year life, here the depreciation would be equal to $60...
Q: What is the present value of an annuity that pays $58 per year for 13 years and an additional $1,000...
A: We can make use of the financial calculator to obtain the present value, PV. Inputs: I/Y = rate = 7....
Q: You bought a share of 4.12 percent preferred stock ($100 par value) for $96.77 last year. The market...
A: The total return on preferred stock is the rate of return which an investor expects from the investm...
Q: What is the present value of a perpetuity that pays annual, end-of-year payments of $850 every year?...
A: End of Year payments =850 Nominal interest rate = 8% Present value of perpetuity=Equal cash flow occ...
Q: Please help me with 11-4 ??♀️
A: Introduction: Investment in Two stock = 10000 Weight of Stock A = 30% Weight of Stock B = 70% Stock ...
Q: You decide to form a portfolio of the following amounts invested in the following stocks. What is th...
A:
Q: Taggart Transcontinental currently has a bank loan outstanding that requires it to make three annual...
A: The question is based on the concept of time value of money .The bank has allowed the borrower to sk...
Q: An ordinary annuity is best defined by which one of the following? a. Increasing payments paid for a...
A: Hey, since there are multiple questions posted, we will answer the first question. If you want any s...
Q: Situational Software Co. (SSC) is trying to establish its optimal capital structure. Its current cap...
A: Current Cost of Equity = Risk Free Rate + Beta * Market Risk premium 14%= 4% +Beta* 7% Beta 7%= (14%...
Q: You expect a tax-free municipal bond portfolio to provide a rate of return of 4%. Management fees of...
A: The computation is as follows:
Q: What is peridocznym fifo and lifo
A: The question is based on the methods of costing inventory, there are three well accepted method of c...
Q: Suppose that you earned a bachelor's degree and now you're teaching high school. The school district...
A: a) The formula to calculate accumulated value of an annuity is given below: Here, i is interest rat...
Q: A pottery factory purchases a continuous belt conveyor kiln for $68,000. A 6.3% APR loan with monthl...
A: Given, Loan amount =$68000, Interest Rate =6.3%, Monthly payments=$765.22, number of payments =? Ter...
Q: A company finances its operations with 60 percent debt and the rest using equity. The annual yield o...
A: Given: Debt (D) = 60% Equity (E) = 40% Cost of debt (rd) = 4.1% Cost of equity (re) = 12.4% Tax = 30...
Q: Greta, an elderly investor, has a degree of risk aversion of A = 3 when applied to return on wealth ...
A: Portfolio-1: S&P 500 Risk Premium = 5% Time Horizon (t) = 1 Year The calculation of the estima...
Q: What are the risks associated with stocks that may not be also in bonds?
A: The question is based on the concept of different types of risk associated with different financial ...
Q: [EXCEL] Yield to maturity: Rudy Sandberg wants to invest in four-year bonds that are currently price...
A: The question is based on the concept to calculate yield of maturity from a bond investment, using fo...
Liquity Rate
A firm used 1 million in cash to puchase inventory.
Will its current ratio rise or fall?
Will its quick ratio rise or fall? Please cplain both.
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 2 images
- Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes discounts. What is the average amount of accounts payable net of discounts? (Assume the $3.65 million of purchases is net of discounts—that is, gross purchases are $3,724,489.80, discounts are $74,489.80, and net purchases are $3.65 million.) Is there a cost of the trade credit the firm uses? If the firm did not take discounts but did pay on the due date, what would be its average payables and the cost of this nonfree trade credit? What would be the firm’s cost of not taking discounts if it could stretch its payments to 40 days?The Stewart Company has $1,566,500 in current assets and $595,270 in current liabilities. Its initial inventory level is $328,965, and it will raise funds as additional notes payable and use them to increase inventory. How much can its short-term debt (notes payable) increase without pushing its current ratio below 2.0? Round your answer to the nearest dollar. $A company has current liabilities of $500 Million, and its current ratio is 2.0. If the firm’s quick ratio is 1.6, how much inventory does it have?
- The Nelson Company has $1,485,000 in current assets and $495,000 in current liabilities. Its initial inventory level is $365,000, and it will raise funds as additional notes payable and use them to increase inventory. A. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar. B. What will be the firms's quick ratio after Nelson has raised the maximum amount of short-term funds? do not round intermediate calculations. Round your answer to two decimal places.The Nelson Company has $1,365,000 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise funds as additional notes payable and use them to increase inventory. 1-How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar. $ 2-What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.The Nelson Company has $1,228,500 in current assets and $455,000 in current liabilities. Its initial inventory level is $305,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar. $ ___________ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places. Quick ratio _________________
- ABC Inc. has $2 million in current assets, its current ratio is 1.6, and its quick ratio is 1.2. The company plans to raise funds as additional notes payable and to use these funds to increase inventory. By how much can ABC's short-term debt (notes payable) increase without pushing its quick ratio below 0.8?The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $375,000, and it will raise fundsas additional notes payable and use them to increase inventory. How muchcan Nelson’s short-term debt (notes payable) increase without pushing itscurrent ratio below 2.0? What will be the firm’s quick ratio after Nelson hasraised the maximum amount of short-term funds?The Stewart Company has $2,392,500 in current assets and $1,076,625 incurrent liabilities. Its initial inventory level is $526,350, and it will raise funds as additionalnotes payable and use them to increase inventory. How much can its short-term debt (notespayable) increase without pushing its current ratio below 2.0?
- Awkward Inc. currently has $2,145,000 in current assets and $858 in current liabilities. The company's managers want to increase the firm inventory, which will be financed by short-term note with the bank. What level of inventories can the firm carry without its current ratio falling below 2.0?The Nelson Company has $1,400,000 in current assets and $500,000 in current liabilities. Its initial inventory level is $330,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Do not round intermediate calculations. Round your answer to the nearest dollar.Copmany A. has $2,491,100 in current assets and $859,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.2 (assuming all other current assets and current liabilities remain constant)?