Competition Increased over time
Answer: 83.53 days.
Explanation:
We would need to calculate the Current Assets as well as the Quick Assets.
Calculating the Current Assets we can use the Current ratio and Current Liabilities as follows,
Current Assets = Current Ratio * Current Liabilities
= 1.22 * 28,000
= $34,160
Then we calculate the Quick Assets which are essentially the most liquid assets being Cash and Cash Equivalents,
= Quick Ratio * Current Liabilities
= 0.71 * 28,000
= $19,880
Inventory will be Current Assets minus Quick Assets because Current Assets include all Current Assets whereas Quick Assets are Cash And Cash Equivalents Current Assets
= 34,160 - 19,880
= $14,280
We can then calculate the Inventory Turnover as,
= Cost of Goods sold / Inventory
= 62,400/14,280
= 4.36974789916 times.
Now we can finally calculate the days of Inventory by dividing the days in a year by the Turnover ratio. We will assume a 365 year.
= 365/4.36974789916
= 83.53 days.
It takes 83.53 days on average does it take to sell the inventory.
Answer:
total market value is $812.05 million
WACC project discount rate is 8.77%
Explanation:
The firm's market value is the sum of the market values of equity,debt and preferred stock.
Equity=10.1*$49=$494.9 million
debt=235,000*$1000*116%=$272.6 million
preferred stock=450,000*$99=$44.55 million
Total market value $812.05 million
WACC=Ke*E/V+Kd*D/V*(1-t)+Kp*P/V
Ke is the cost of equity=4%+1.55(8.9%-4%)=11.60%
Kd= rate(30,$1000*8.9%/2,-$1000*116%,1000)=3.57% semiannually
kd=3.57%*2=7.14%
Kp=5%
WACC=(11.50%*494.9/812.05)+(7.14%*272.6/812.05*(1-0.38)+(5%*44.55/812.05)=8.77%