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In: Accounting
CCC currently has sales of $24,000,000 and projects sales of $30,000,000 for next year. The firm's...
CCC currently has sales of $24,000,000 and projects sales of $30,000,000 for next year. The firm's current assets equal $6,000,000 while its fixed assets are $7,000,000. The best estimate is that current assets will rise directly with sales while fixed assets will rise by $400,000. The firm presently has $2,400,000 in accounts payable, $1,400,000 in long-term debt, and $9,200,000 in common equity. All current liabilities are expected to change directly with sales. CCC plans to pay $800,000 in dividends next year and has a 5.0% net profit margin. Assuming the increase in fixed assets will occur, what is the most sales could equal next year without using discretionary sources of funds? (Round your answer to the nearest dollar.)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
CCC currently has sales of $24,000,000 and projects sales of $30,000,000 for next year. The firm's...
CCC currently has sales of $24,000,000 and projects sales of
$30,000,000 for next year. The firm's current assets equal
$6,000,000 while its fixed assets are $7,000,000. The best estimate
is that current assets will rise directly with sales while fixed
assets will rise by $400,000. The firm presently has $2,400,000 in
accounts payable, $1,400,000 in long-term debt, and $9,200,000 in
common equity. All current liabilities are expected to change
directly with sales. CCC plans to pay $800,000 in dividends next...
CCC currently has sales of $27,000,000 and projects sales of $36,450,000 for next year. The firm's...
CCC currently has sales of $27,000,000 and projects sales of
$36,450,000 for next year. The firm's current assets equal
$7,000,000 while its fixed assets are $8,000,000. The best estimate
is that current assets will rise directly with sales while fixed
assets will rise by $200,000. The firm presently has $3,500,000 in
accounts payable, $1,400,000 in long-term debt, and $10,100,000 in
common equity. All current liabilities are expected to change
directly with sales. CCC plans to pay $900,000 in dividends next...
(26) CCC currently has sales of $28,000,000 and projects sales of $39,200,000 for next year. The...
(26) CCC currently has sales of $28,000,000 and projects sales
of $39,200,000 for next year. The firm's current assets equal
$7,000,000 while its fixed assets are $6,000,000. The best estimate
is that current assets will rise directly with sales while fixed
assets will rise by $300,000. The firm presently has $3,500,000 in
accounts payable, $2,100,000 in long-term debt, and $7,400,000 in
common equity. All current liabilities are expected to change
directly with sales. CCC plans to pay $1,000,000 in dividends...
Johnson, Inc. projects sales for next year will be 55,000 units if the sales price is...
Johnson, Inc. projects sales for next year will be 55,000 units
if the sales price is $27.50. At this level, unit fixed costs will
be $8.30 while total variable costs will be $693,000. The vice
president of marketing advises management to reduce sales price to
$26.00 and to undertake a national advertising campaign costing
$12,000.
What is the breakeven point for the company in terms of dollars
and units before giving effect to the vice president's plan?
What is the...
Nextbig Corp. currently has sales of $870 million; sales are expected to grow by 26% next...
Nextbig Corp. currently has sales of $870 million; sales are
expected to grow by 26% next year (year 1). For the year after
next (year 2), the growth rate in sales is expected to equal 13%.
Over each of the next 2 years, the company is expected to have a
net profit margin of 11% and a payout ratio of 55%, and to
maintain the common stock outstanding at 25.85 million shares. The
stock always trades at a P/E of...
BWP projects sales of 100000 units next year at an average price of $50 per unit....
BWP projects sales of 100000 units next year at an average price
of $50 per unit. Variable costs are estimated at 40% of revenue,
and fixed costs will be $2.4 million. BWP has $1 million in bonds
outstanding, on which it pays 7%, and its marginal tax rate is 38%.
There are 100000 shares of stock outstanding which trade at their
book value of $30. Compute BWP's contribution, contribution margin,
net income, DOL, and EPS. Round the answers to two...
Star Computer Services has the following three investment projects available this year. The firm's cost of...
Star Computer Services has the following three investment
projects available this year.
The firm's cost of capital is 7 %.
Project
X
Y
Z
Initial cost
–$20,000
–$30,000
–$30,000
Year 1 CF
10,000
15,000
12,000
Year 2 CF
11,000
14,000
13,000
Year 3 CF
12,000
13,000
14,000
Year 4 CF
13,000
12,000
15,000
a.
Which projects are acceptable? Why?
b.
What is your decision if the projects are mutually
exclusive?
Management is considering a change in the sales force compensation plan. Currently each of the firm's...
Management is considering a change in the sales force
compensation plan. Currently each of the firm's two salespeople is
paid a salary of $2,500 per month.
g-1. Calculate the monthly operating income (or
loss) that would result from changing the compensation plan to a
salary of $400 per month, plus a commission of $0.85 per unit,
assuming a sales volume of 5,050 units per month. (Do not
round intermediate calculations.)
g-2. Calculate the monthly operating income (or
loss) that would...
The firm's inventory policy is to have ending inventory equal to 10% of next month's sales.
The firm's inventory policy is to have ending inventory equal to
10% of next month's sales.Fill in the missing numbers.FebruaryMarchAprilEnding inventory5,000Beginning inventoryBudgeted sales12,00013,00019,000Budgeted production(If you get stuck on the beginning inventory for February: it is
equal to the ending inventory for January, which you can compute
with the available data on February sales)
Randy currently has an obligation that he will pay $1 million a year for the next...
Randy currently has an obligation that he will pay $1 million a
year for the next 3 years, what is the duration of his obligation
if the appropriate discount rate is 5%?
If Randy wants to immunize his obligation using a 1-year zero
coupon bond and a perpetuity both yielding 6%. I rounded the
durations to two decimal places to minimize rounding errors.
What is the weight he should invest in the zero?
What is the weight he should invest...
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