fm14 4 - being needed. 14-5 a. . earnings Retained stock...

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Answers and Solutions: 14 - 4 14-4 S 2007 = $2,000,000; A 2007 = $1,500,000; CL 2007 = $500,000; NP 2007 = $200,000; A/P 2007 = $200,000; Accruals 2007 = $100,000; PM = 5%; d = 60%; A * /S 0 = 0.75. AFN = (A * /S 0 ) S - (L * /S 0 ) S - MS 1 (1 - d) = (0.75) S - 000 , 000 , 2 $ 000 , 300 $ S -(0.05)(S 1 )(1 - 0.6) = (0.75) S - (0.15) S - (0.02)S 1 = (0.6) S - (0.02)S 1 = 0.6(S 1 - S 0 ) - (0.02)S 1 = 0.6(S 1 - $2,000,000) - (0.02)S 1 = 0.6S 1 - $1,200,000 - 0.02S 1 $1,200,000 = 0.58S 1 $2,068,965.52 = S 1 . Sales can increase by $2,068,965.52 - $2,000,000 = $68,965.52 without additional funds
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Unformatted text preview: being needed. 14-5 a. . earnings Retained stock Common debt term-Long Payable Accounts equity and s liabilitie Total + + + = $1,200,000 = $375,000 + Long-term debt + $425,000 + $295,000 Long-term debt = $105,000. Total debt = Accounts payable + Long-term debt = $375,000 + $105,000 = $480,000. Alternatively, Total debt = equity and s liabilitie Total- Common stock - Retained earnings = $1,200,000 - $425,000 - $295,000 = $480,000....
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

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