Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $120,000 if credit were extended to these new customers. Of the new accounts receivable generated, 6 percent will prove to be uncollectible. Additional collection costs will be 3 percent of sales, and production and selling costs will be 71 percent of sales. The firm is in the 15 percent tax bracket.

a. Compute the incremental income after taxes.

b. What will Johnson’s incremental return on sales be if these new credit customers are accepted? (Input your answer as a percent rounded to 2 decimal places.)

c. If the accounts receivable turnover ratio is 4 to 1, and no other asset buildup is needed to serve the new customers, what will Johnson’s incremental return on new average investment be? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

(ONLY NEED STOCK C ANSWERS)

Consider the following three stocks:

Stock A is expected to provide a dividend of $10.40 a share forever.

Stock B is expected to pay a dividend of $5.40 next year. Thereafter, dividend growth is expected to be 2.00% a year forever.

Stock C is expected to pay a dividend of $5.40 next year. Thereafter, dividend growth is expected to be 18.00% a year for five years (i.e., years 2 through 6) and zero thereafter.

a-1. If the market capitalization rate for each stock is 8.00%, what is the stock price for each of the stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. If the market capitalization rate for each stock is 5.00%, what is the stock price for each of the stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Assume that Atlas Sporting Goods Inc. has $810,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of 12 percent, but with a high-liquidity plan the return will be 9 percent. If the firm goes with a short-term financing plan, the financing costs on the $810,000 will be 6 percent, and with a long-term financing plan the financing costs on the $810,000 will be 7 percent.

a. Compute the anticipated return after financing costs with the most aggressive asset-financing mix.

b. Compute the anticipated return after financing costs with the most conservative asset-financing mix.

c. Compute the anticipated return after financing costs with the two moderate approaches to the asset-financing mix.

d. If the firm used the most aggressive asset-financing mix described in part a and had the anticipated return you computed for part a, what would earnings per share be if the tax rate on the anticipated return was 30 percent and there were 20,000 shares outstanding? (Round your answer to 2 decimal places.)

e-1. Now assume the most conservative asset-financing mix described in part b will be utilized. The tax rate will be 30 percent. Also assume there will only be 5,000 shares outstanding. What will earnings per share be? (Round your answer to 2 decimal places.)

e-2. Would the conservative mix have higher or lower earnings per share than the aggressive mix?

• Lower

• Higher

Please concisely answer the following questions on Sarbanes-Oxley and Dodd-Frank.

1. Describe each Act, their major components and their impacts.
2. Why did Congress pass each Act?

3. Describe the issues these Acts have solved and the problems they have caused.

4. Should Sarbanes-Oxley and/or Dodd-Frank be modified, repealed, replaced, or left alone? Support your answer.

This exercise parallels the machine-purchase decision for the Mendoza Company that is discussed in the body of the chapter. Assume that Mendoza is exploring whether to enter a complementary line of business. The existing business line generates annual cash revenues of approximately $4,350,000 and cash expenses of $3,675,000, one-third of which are labor costs. The current level of investment in this existing division is $12,800,000. (Sales and costs of this division are not affected by the investment decision regarding the complementary line.)
  
Mendoza estimates that incremental (noncash) net working capital of $34,000 will be needed to support the new business line. No additional facilities-level costs would be needed to support the new line—there is currently sufficient excess capacity. However, the new line would require additional cash expenses (overhead costs) of $434,000 per year. Raw materials costs associated with the new line are expected to be $1,360,000 per year, while the total labor cost is expected to double.
  
The CFO of the company estimates that new machinery costing $3,700,000 would need to be purchased. This machinery has a six-year useful life and an estimated salvage (terminal) value of $592,000. For tax purposes, assume that the Mendoza Company would use the straight-line method (with estimated salvage value considered in the calculation).

Assume, further, that the weighted-average cost of capital (WACC) for Mendoza is 14% (after-tax) and that the combined (federal and state) income tax rate is 45%. Finally, assume that the new business line is expected to generate annual cash revenue of $3,975,000.

after depositing 23795890.29 today into an account which offers 12% compounded annually, how many times will you be able to make annual withdrawals of 2675000.00 from the account .

if A, the first withdrawal is made today, immediately after the deposit?

B, the first withdrawal is made one year from today?

The top part of Ramakrishnan, Inc.’s 2018 and 2017 balance sheets is listed below (in millions of dollars).

Calculate Ramakrishnan, Inc.’s current ratio for 2018 and 2017. (Round your answers to 2 decimal places.)

Calculate Ramakrishnan, Inc.’s quick ratio for 2018 and 2017. (Round your answers to 2 decimal places.)

Calculate Ramakrishnan, Inc.’s cash ratio for 2018 and 2017. (Round your answers to 2 decimal places.)

Using the data in the table to the​ right, calculate the return for investing in the stock from January 1 to December 31. Prices are after the dividend has been paid.

Date Price Dividend 

Jan 1 $ 32.42 0

Feb 5 $ 32.17 $ 0.18

May 14 $ 30.73 $ 0.21

Aug 13 $ 32.83 $ 0.17

Nov 12 $ 38.79 $ 0.21

Dec 31 $ 42.84 0

1. CFO of LincolnHike Inc. has created the firm’s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 20% to 295.5 million. Current assets, fixed assets, and short-term debt are 20 percent, 90 percent, and 15 percent of sales respectively. The company pays out 40 percent of its net income in dividends. The company currently has 32 million of long-term debt, and 16 million in common stock par value. The profit margin is 12%. (20 points)

1. Construct the current balance sheet for the firm using the projected sales figure.

2. Based on the sales growth forecast, how much does the company need in external funds for the upcoming fiscal year.

3. Construct the firm’s pro forma balance sheet for the next fiscal year and confirm the external funds needed that you calculated in part (b).

Super Sonics Entertainment is considering buying a machine that costs $435,000. The machine will be depreciated over five years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments of $107,500. The company can issue bonds at a 9 percent interest rate. If the corporate tax rate is 35 percent, should the company buy or lease?

Allen Products​ LP, wants to do a scenario analysis for the coming year. The pessimistic prediction for sales is $ 900,000​; the most likely amount of sales is $ 1,118,000​; and the optimistic prediction is $ 1,288,000. ​Allen's income statement for the most recent year is shown here

Allen Products, Inc. Income Statement for
the Year Ended December 31, 2019  
Sales revenue   $937,400
Less: cost of good sold   436,828
Gross profits   $500,572
Less: operating expenses   245,599
Operating profits   $254,973
Less: interest expense   30,934
Net profit before taxes   $224,039
Less: taxes (rate 25%)   56,010
Net profits after taxes   $168,029

a. Use the ​percent-of-sales method, the income statement for December​ 31,2019​, and the sales revenue estimates to develop​ pessimistic, most​ likely, and optimistic pro forma income statements for the coming year.

b. Explain how this method could result in overstatement of profits for the pessimistic case and understatement of profits for the most likely and optimistic cases.

c. Restate the pro forma income statements prepared in part a. to incorporate the following assumptions about the costs:

$252,497 of the cost of goods sold is​ fixed; the rest is variable. $193,516 of the operating expenses is​ fixed; the rest is variable. All the interest expense is fixed.​

d. Compare your findings in part c. to your findings in part a. Do your observations confirm your explanation in part b​?

Use the ​percent-of-sales method, the income statement for December​ 31, 2019, and the sales revenue estimates to develop​ pessimistic, most​ likely, and optimistic pro forma income statements for the coming year.

Complete the pro forma income statement for the year ending December​ 31, 2020 that is shown below​ (pessimistic scenario): ​ (Round the percentage of sales to one decimal place and the pro forma income statement accounts to the nearest​ dollar.)

1. How do you think financial ratios differ across different industries? Compare two industries of your choice and select a few ratios and explain whether you think the ratios would be higher or lower for each of those industries and explain why. 2. What are some uses and limitations of financial ratios?

Explain what is capital budgeting 300 words

Explain the valuation of constant growtn and super normal growth of stock

List and explain steps involved in Capital Budgeting process.