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Week 1 Homework Problems

Week 1 Homework Problems - Week 1 Homework Problems Dustin...

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Week 1 Homework Problems Dustin Taylor Chadron State College FIN 631 – Managerial Finance Chapter 2 #10 CFA = CFC + CFS CFA = $95,000 - $345,000 = -$250,000 -$250,000 = OCF - (-$85,000) - $810,000 $250,000 = -OCF +(-$85,000) + $810,000 OCF + $250,000 = -$85,000 + $810,000 OCF = -$85,000 + $810,000 - $250,000 OCF = $475,000 #15 a. OCF = EBIT + Depreciation – Taxes OCF = $77,600 + $13,800 - $23,520 OCF = $67,880 b. CFC = Interest – Net new borrowing CFC = $10,400 - (-$7,500) CFC = $17,900 c. CFS = Dividends paid – Net new equity raised CFS = $12,500 - $6,000 CFS = $6,500 d. CFA = OCF – Net capital spending – Change in NWC $17,900 + $6,500 = $67,880 - ($21,000 + $13,800) - Change in NWC $24,400 = $67,880 - $34,800 - Change in NWC $24,400 = $33,080 - Change in NWC Change in NWC = $8,680 Chapter 3 #13 a. EFN = (1.0946 x $6,660,000) - (.1757 x $6,660,000) - (.1423 x $43,660,000) x (1 - .3) EFN = $7,290,000 - $1,170,000 - $6,212,700 x .7 EFN = $1,771,110
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b. Assets Liabilities and equities Current assets $12,390,000 Short-term debt $7,670,000 Long-term debt $7,000,000 Fixed assets $35,400,000 Common stock $3,000,000 Accum. Retained earnings $28,348,890 Total equity $31,348,890 Total assets $47,790,000
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