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Virty [35]
3 years ago
15

Beranek Corp has $695,000 of assets (which equal total invested capital), and it uses no debt - it is financed only with common

equity. The new CFO wants to employ enough debt to raise the total debt to total capital ratio to 40%, using the proceeds from borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio?
Business
1 answer:
lesya692 [45]3 years ago
3 0

Answer:

$278,000

Explanation:

Data provided:

Total invested capital or assets = $695,000

Total debt to total capital ratio = 40%

now,

\frac{\textup{Total debt}}{\textup{Total capital}} = \frac{\textup{40}}{\textup{100}}

or

Total debt = 0.4 × Total capital

or

Total debt = 0.4 × $695,000

or

Total debt = $278,000

Hence,

The firm must borrow $278,000 to achieve the desired ratio

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Clabber Company has bonds outstanding with a par value of $123,000 and a carrying value of $111,100. If the company calls these
White raven [17]

Answer:

The gain on retirement = $4,600

Explanation:

The gain or loss on retirement = Carrying Value of the Bonds -  Call price of the Bonds

The gain or loss on retirement = $111,100 -  $106,500

The gain on retirement = $4,600

Note: Par value will not be taken for the calculation of the above

4 0
3 years ago
An investor must decide between putting $2,000 into a regular retirement plan or putting $1,440 into a Roth retirement plan. If
Novosadov [1.4K]

Answer:

They both produced the same cash amount

Explanation:

The regular retirement would have its deducted after withdrawal from the plan while Roth retirement plan's tax would have been deducted prior to investing funds in the plan

The future value of the $2000 is computed thus:

FV=PV*(1+r)^n

PV is the amount saved in the plan which is $2000

r is the growth rate of the funds in the plan which is 12%

n is the number of years the amount would be left in the plan

FV=$2000*(1+12%)^20=$ 19,292.59  

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The future value of the $1,440 is computed thus:

FV=$1,440*(1+12%)^20=$ 13,890.66  

The Roth plan has not tax implication thereafter as tax was paid before savings.

7 0
3 years ago
A project with a zero net present value indicates that it is acceptable. unacceptable. going to have an acceptable cash payback
horsena [70]

Answer:

acceptable.

Explanation:

Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.

Generally, projects are considered to be temporary because they usually have a start-time and an end-time to complete, execute or implement the project plan.

The net present value (NPV) of a project can be defined as the difference between present value of cash-inflow into a project and that of cash-outflow over a specific period of time. Thus, it is simply the value of all cash-flows for a project with respect to its life span.

A project with a zero net present value indicates that it is acceptable.

This ultimately implies that, investors and project managers are advised to only invest in projects that are having a positive net present value that is greater than or equal to zero.

6 0
3 years ago
Fill in the blanks: An annuity is worth _______ than a perpetuity, and a constant annuity is worth _______ than a growing annuit
murzikaleks [220]

Answer:

D

Explanation:

8 0
3 years ago
According to the commercialization stage of the new product development process, following the decision to introduce the new pro
aivan3 [116]

Answer: (A) Where to launch the new product

Explanation:

 The commercialization stage is the process of development the new products and the services in the market that can be used in solving the various types of life based problems.

The main objective of the commercialization stage is that it include the customer support, the production and the marketing for achieving the new products and the services commercial success in an organization.

according to the question, the commercialization stage is developing the new products and the services and then the company should decide where to introduce or launch the new services and the products.

 Therefore, Option (A) is correct.

4 0
3 years ago
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