Weatherford Industries Inc. has the following ratios:A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin = 0.10; and payout ratio = 0.45, or 45%. Sales lastyear were $100 million. Assuming that these ratios will remain constant, use the AFN equationto determine the maximum growth rate (the sustainable growth rate) Weatherford canachieve without having to employ nonspontaneous external funds.

Q: Finally, assume that the new product line isexpected to decrease sales of the firm’s otherlines by…

A: Incremental cash flow is the additional cash flow that occurs when a company starts a new project.

Q: Oman Cement has the following returns. Beginning value=OMR. 1000, End of Year1= OMR 1050, End of…

A: The Average Annual Growth Rate (AAGR) measures the average growth over equally period of time. It is…

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A: The degree of operating leverage can be used to estimate change in operating income with respect to…

Q: Airport Motors, Inc. has $2,305,800 in current assets and $854,000 in current liabilities. The…

A: Current Ratio = Current AssetsCurrent Liabilities

Q: Phil plc and Costas plc are identical firms except that Costas is more levered. Both companies will…

A: market value = [(probability of expansion* profit before interest and taxes in case of expansion) +…

Q: Chadron Motors has a profit margin of 5 percent and a dividend payout ratio of 20 percent. The total…

A: As per the guidelines we can provide the answer for 1 question ( as the question are different).…

Q: This year, the company's sales has increased from $200,000 to $240,000 and its profit has increased…

A: Degree of Operating Leverage = (% change in operating Income / % change in sales)

Q: An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…

A: 1) Computation of DOL, DFL, DCL is as follows:DOL=Sales -Variable costSales -variable cost-fixed…

Q: Lux Co. recently reported sales of P100 million, and net income equal to P5 million.  The company…

A: Answer -  Additional funds needed (AFN )is a financial concept used when a business looks to expand…

Q: Dhofar Cattle feed has the following returns. Beginning value=OMR. 350, End of Year1= OMR. 365, End…

A: The compound annual growth rate (CAGR) of an investment is the average annual growth rate over a…

Q: alculate the sustainable growth rate

A: Answer:-  Sustainable growth rate = 14.05 % Explanation:-   Total asset turnover = 1 / Capital…

Q: ABC Inc. is a juice producer which has been growing steadily for the past 5 years. According to the…

A: The time value of money is the concept that dictates the worth of $1 of money of today  is more than…

Q: This year, the company's sales has increased from $200,000 to $240,000 and its profit has increased…

A: Contribution margin ratio = Change in profit ÷ Change in sales Degree of operating leverage =…

Q: Levine, Inc., has an ROA of 7.7 percent and a payout ratio of 27 percent.   What is its internal…

A: Growth rate = ROA*Retention ratio Where ROA = Return on assets or investment i.e. 7.7% Retention…

Q: A firm has total interest charges of $10,000 per year, sates of $1 million, a tax rate of 40…

A: Times interest earned ratio or interest coverage ratio shows ability of the company in paying it's…

Q: Consider the following information that you propose to use to obtain an estimate of year 2004 EPS…

A: The investors use the information displayed by the company in their financial statement that is the…

Q: Vapor Lock Motors’ EBIT is $7,000,000, the company’s interest expense is $2,000,000, and its tax…

A: DFL means how much the earnings of a firm change due to change in the debt-equity ratio of the firm.…

Q: Last year the Rondoelea Products Company had $142 million in annual sales and a net profit margin…

A: EBIT = [ (Sales x net profit margin) / (1 - tax rate) ] + (Amount of debt * Interest rate) EBIT =…

Q: Ramble On Co. wishes to maintain a growth rate of 10.4 percent per year, a debt-equity ratio of 1.0,…

A: Computation:

Q: Co. forecasted the following data for 2022 ·      Projected unit sales is 5,000 at a selling price…

A:

Q: unland Corp had sales of $389,000 in 2017. If management expects its sales to be $476,450 in 4…

A: The question is based on the concept for calculation of annual growth rate . Formula as :…

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A: Sales in the next year will increase by 15% and the current assets, fixed assets and current…

Q: You've collected the following information about Molino, Inc. 190,000 Sales Net income $13,600…

A: a.To calculate the sustainable growth rate, first calculate the return on equity and retention ratio…

Q: If sales increase from R80 000 per year to R120 000 per year, and if the operating leverage is 5,…

A: Net Income is defined as the total amount of the funds, which is earned by the business in the…

Q: A firm wishes to maintain a growth rate of 11 percent and a dividend payout ratio of 64 percent. The…

A: Calculation of debt equity ratio: Answer: Debt-equity ratio of firm is 2.40

Q: Chadron Motors has a profit margin of 5 percent and a dividend payout ratio of 20 percent. The total…

A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…

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A: Sustainable growth rate= Asset turnover* Profit margin * (1- dividend payout ratio) = 80%*10%*60% =…

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A: Given, Expected sales next year = $3,100,000 Increase in inventory and accounts = $540,000 Profit…

Q: Raddus is a technology company and has an enterprise value of $100 million. It currently has $25…

A: Equity seems to be the worth of ownership in anything in the realm of business and finance. Equity…

Q: Dhofar Cattle feed has the following returns. Beginning value=DOMR. 350, End of Year1 = OMR. 365,…

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: MGL forecasted the following data for 2022 · Projected unit sales is 5,000 at a selling price of…

A: The degree of combined leverage is calculated as ratio of contribution and income after interest…

Q: An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…

A: formula for DOL, DFL and DCL DOL=contibutionEBIT=sales - variable costsales - variable cost - fixed…

Q: Consider the following information Year                    Profit                Ending book value…

A: The present value of a future sum of money or stream of cash flows with a fixed rate of return is…

Q: Cordell, Inc., has an operating leverage of 3. Sales are expected to increase by 9% next year. What…

A: Operating leverage measures the relationship between sales revenue and EBIT. It is affected by the…

Q: Tinberg Cans expects sales next year to be $50,000,000. Inventory and accounts receivable (combined)…

A: In simplest terms, the amount of external funds needed  (EFN) will be equal to the expected increase…

Q: Tata Consumer Products just paid a dividend of 1.49 and anticipates a short term growth rate of 15%…

A: In this question, share value can be found out by using the Gordon growth model. Gordon growth model…

Q: In year​ 1, AMC will earn $2,900 before interest and taxes. The market expects these earnings to…

A: The capital asset pricing model (CAPM) Expected returns  is calculated under Capital Asset pricing…

Q: Tinsley, Incorporated, wishes to maintain a growth rate of 12 percent per year and a debt-equity…

A: Return on equity = Profit margin / Total assets to sales * (1+Debt equity ratio) Retention ratio =…

Q: Levine, Inc., has an ROA of 6.7 percent and a payout ratio of 21 percent.   What is its internal…

A: We have; Retuern on assets are 6.7% Payout ratio is 21% To Find: Internal growth rate

Q: In year​ 1, AMC will earn $2,900 before interest and taxes. The market expects these earnings to…

A: Free cash flow to equity (FCFE): It is  the fund  generated by  business available to be potentially…

Q: Bulldogs Inc. currently has earnings before interest and taxes of P3,000,000, a degree of combined…

A: Degree of Operating Leverage = Degree of Combined Leverage / Degree of Financial Leverage = 8 / 2 =…

Q: The profit margin is 15% and the dividend payout is 70%. Last year sales were RO 100 million and…

A: Financing is one of important financial decision for firm. To start up new activities or projects…

Q: Airspot Motors, Inc. has $2,343,600 in current assets and $868,000 in current liabilities. The…

A: Given the following information: Current assets: $2,343,600 Current liabilities: $868,000 The…

Q: You have located the following information on Webb’s Heating & Air Conditioning: debt ratio is…

A: Debt ratio = 63%Hence, equity multiplier = 1 / (1 - Debt ratio) = 1 / (1 - 63%) = 2.7027

Q: Phil plc and Costas plc are identical firms except that Costas is more levered. Both companies will…

A: Market value of a firm is determined by multiplying the outstanding shares issued by the company by…

Q: Net Income for Company A is $200,000 in 2014, $300,000 in 2015, $400,000 in 2016, $500,000 in 2017,…

A: The dividend discount model (DDM) is a quantitative method used for predicting the worth} of a…

Q: You are given the following information on Kaleb's Heavy Equipment: Profit margin Capital intensity…

A: The formula for the calculation of sustainable growth rate is Sustainable growth rate=ROE x b1-ROE…