FINANCIAL ACCT-CONNECT
FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Assume that James Park and Eric Friedman of Fitbit plan on expanding their business to accommodate more product lines. They are considering financing expansion in one of two ways: (1) contributing more of their own funds to the business or (2) borrowing the funds from a bank. Identify at least two issues that James and Eric should consider when trying to decide on the method forfinancing their expansion.
Kate is considering expanding and bringing in several employees. To do this she will need a larger facility and to purchase more equipment. Which means additional financing. Answer this: look at the financial statements as if you were a banker considering her for a loan comment on your findings and use calculations to support your answer.
Complete your calculations by filling in the highlighted cells. Note: the PV Annuity table is provided for you. Discuss if you think the cookie business should accept or reject the purchase of the new equipment and why.Additional information has come to your attention regarding the equipment purchase. One of the partner's brother owns the company that sells the equipment and insists the equipment is needed. Discuss any ethical concerns you see with this type of transaction.  Cookie Business           As the owner of the Cookie Business, you are considering the following investment:           Purchase of new equipment  $  250,000.00       Expected  annual increase in sales   $    48,017.50       Time frame 7 years     Acceptable rate needed 9%                 Calculate the Internal Rate of Return:         PV of annuity factor         Internal rate of return                   Accept or reject

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FINANCIAL ACCT-CONNECT

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