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DaniilM [7]
3 years ago
14

Suppose Tefco Corp. has a value of ​$100100 million if it continues to​ operate, but has outstanding debt of ​$120120 million th

at is now due. If the firm declares​ bankruptcy, bankruptcy costs will equal ​$2020 ​million, and the remaining ​$8080 million will go to creditors. Instead of declaring​ bankruptcy, management proposes to exchange the​ firm's debt for a fraction of its equity in a workout. What is the minimum fraction of the​ firm's equity that management would need to offer to creditors for the workout to be​ successful?
Business
1 answer:
bazaltina [42]3 years ago
4 0

Answer:

The minimum fraction is 80%

Explanation:

Creditors receive 80 million in bankruptcy since if there is bankruptcy, the bankruptcy cost is $20m while the other $80m is received by creditors, so they need to receive at least this much. Therefore, the minimum fraction of the​ firm's equity that management would need to offer to creditors for the workout to be​ successful is 80%. Tefco could offer its creditors 80% of the firm in a workout.

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The WorldLight Company produces two light fixtures (products 1 and 2) that require both metal frame parts and electrical compone
Deffense [45]

Answer:

Explanation:

a) x1 = number of unit product 1 to produce , and

x2 number of unit product 2 to produce

A linear program that will maximize world light profit is the following

maximize x_1+2x_2 subject to x_1+3x_2\leq 200

2x_1+2x_2\leq 300\\\\x_2\leq 60\\\\x_1\geq 0\\\\x_2\geq 0

Unit 1 is used both in products in 1 : 3 ratio which can be a maximum of 200 unit 2 is used in 2 : 2 ratio which can be maximum of 300

So, this can be written as the inequations

Profit functio is p = 0ne dollar on product A and two dollar on product B

= x + 2y

Now , we find a feasible area whose extremeties will give the maximum profit for, the  graph is ( see attached file )

So on the graph, we can get the other extremeties of the shaded regional so which will not give maximum profit ,

Thus , the maximum possible profit is

p = ($1 * 125) + ($2 * 25)

= $175

4 0
4 years ago
Barton and Fallows form a partnership by combining the assets of their separate businesses. Barton contributes accounts receivab
Zigmanuir [339]

Answer:

(a) Barton's investment

Date   Account Titles and Explanation               Debit       Credit

          Accounts receivables                              $44,900

          ($48,000 - $3,100)

          Equipment                                                 $90,000

                 Allowances for uncollectible                               $1,300

                 Barton Capital                                                       $133,600

           (To record Barton's contribution)

(b) Fallows' investment

Date   Account Titles and Explanation               Debit       Credit

          Cash                                                           $28,700

          Merchandise Inventory                             $60,500

                  Fallow Capital                                                      $89,200

           (To record Fallow's contribution)

3 0
4 years ago
What is traditionalist account? Give an example.​
horsena [70]

Answer:

in folklore, a narrative containing information about actual persons and events. Originating from the tales of eyewitnesses, the traditional account departs from its original factual basis when retold and becomes subject to free poetic interpretation.

7 0
3 years ago
Roberta, a store manager, uses her coercive power effectively to motivate employees. because of her coercive power, roberta woul
sp2606 [1]
Given that <span>Roberta, a store manager, uses her coercive power effectively to motivate employees. because of her coercive power, Roberta would be able to fire a subordinate.

</span><span>Coercive power is the ability to influence someone's decision making by taking something away as punishment or threatening punishment if the person does not follow instructions. It can be a severe way to get staff members to follow along with a company plan, but it can be necessary in some cases.</span>
5 0
3 years ago
47:49
rusak2 [61]
The correct answer is
8 0
3 years ago
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