--%>
Assignment Help - homework help

Long-Term Financing Needed

Long-Term Financing Needed : - At year-end 2012, total assets for Ambrose Inc. were $1.2 million and accounts payable were $375,000. Sales, which in 2012 were $2.5 million, are expected to increase by 25% in 2013. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Ambrose typically uses no current liabilities other than accounts payable. Common stock amounted to $425,000 in 2012 and retained earnings were $295,000. Ambrose plans to sell new common stock in the amount of $75,000. the firm's profit margin on sales is 6%; 60% earnings will be retained.

a. What was Ambrose's total debt in 2012?

b. How much new long-term debt financing will be needed in 2013? (Hint: AFN - New stock = New long-term debt.)

17-12 Excess Capacity

Edney Manufacturing Company has $2 billion in sales and $0.6 billion in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity.

a. What level of sales could Edney have obtained if it had been operating at full capacity?

b. What is Edney's Target fixed asstes/ Sales ratio?

c. If Edney's sales increase 30%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/ Sales ratio?

   Related Questions in Corporate Finance

  • Q : What are capital investment The capital

    The capital investment appraisal techniques such as NPV, IRR, ARR, PV and Time value of money have become irrelevant post Celtic Tiger. Due to the depth of the recession companies do not have budgets to invest. Discus First use this information when you are writing this essay: 1.&

    		•
  • Q : Marketing Decisions & Profitability

    Marketing Decisions Assignment:  Email the answers to the following questions in an attached word document using the proper file name format as follows:  1   

    		•
  • Q : Who described option pricing with

    Who described option pricing with deterministic volatility?

    		•
  • Q : WCR lower cost of storage Inventory is

    Inventory is an important part of WCR estimation. It is a current asset, which depletes over period of time. Also, it requires creation of facility, which would help in storing the inventory and estimate the associated cost of maintaining and transporting it. The esti

    		•
  • Q : Define Credit and Collections Credit &

    Credit & Collections: Usually, credit is stated as the procedure of providing a loan, in which one party transfers wealth to the other with the expectation that it will be re-paid in full plus interest. The definition of collections is connected t

    		•
  • Q : Tax credit for lease payments problem

    ABC Inc. is planning to lease a computer for $3000 per annum, payable in advance, for a period of 4 years. The lease will cover maintenance costs. ABC CFO feels that if he buys the same computer he should be able to sell it at 15% of the purchase price after 4 years.

    		•
  • Q : Which model was great breakthrough for

    Which one model was great breakthrough for side of finance theory?

    		•
  • Q : Determine the future value What would

    What would the future value after 5 years of $100 be at 10% compound interest?

    		•
  • Q : Market for Corporate Bonds Write some

    Write some point regarding Market for Corporate Bonds.

    		•
  • Q : Problem on price share and stock

    Brittney and Kim Wan Sun have successfully launched a successful talent agency, ABC. They expect the firm’s earnings and dividends to grow by 20% annually for the next 10 years and they establish a strong base and to grow at a constant 5% per year thereafter. AB

    		•