Cooperatives save members money by

The Simon Company (SIMON) currently has $300,000 market value (and book value) of perpetual debt outstanding carrying a coupon r

Reptile [31]

Answer:

The answer is "4,750"

Explanation:

They have indeed been given the information that we require.

The current market cap for Simon Company (SIMON) is $300,000.

rate= 6%

EBIT=$150,000

The business has no plans to expand.

The current cost of capital is 8.8%,

The tax rate is 40%.

The company has 10,000 shares of common stock mostly on market.

The stock is being offered at a $90.00 per share price.

Assume SIMON is considering switching in its current financial performance to one that results in a share price of $96 per share.

The resultant capital structure would have a combined valuation of $504,000 in capital and $756,000 in equity.

Remaining Shares= equity market value / per share price

$n =\frac{S}{P} \\\\= \frac{\$504,000}{ \$96}\\\\= \$5,250$

The initial number of shares minus the resultant number of shares equals the number of repurchased shares:

AJC will buy back a certain number of shares.

$= 10,000 - 5,250\\\\= 4,750\\$

8 0

3 years ago

Gardner Company expects sales for October of $249,000. Experience suggests that 45% of sales are for cash and 55% are on credit.

yarga [219]

Answer:

$68,475

Explanation:

Data provided

Sales in October = $249,000

Credit percentage = 55%

Following month percentage = 50%

The calculation of accounts receivable is shown below:-

Credit sales in October = $249,000 × 55%

= $136,950

Collection collected in October

= $136,950 × 50%

= $68,475

Therefore, for computing the collection collected in October we simply multiply the credit sales in October with following month percentage.

6 0

4 years ago

g Suppose that if GSI drops the price on the Glucoscan 3000 immediately, it can increase sales over the next year by 30% to 130,

Amanda [17]

Complete Question:

Glucose Scan Incorporated (GSI) currently sells its latest glucose monitor, the Glucoscan 3000, to diabetic patients for $129. GSI is considering lowering the sale price to $99 per unit. The cost of goods sold for each Glucoscan unit is $50, and GSI expects to sell 100,000 units over the next year. The marginal corporate tax rate is 40%. Suppose that if GSI drops the price on the Glucoscan 3000 to $99 immediately, it can increase sales over the next year by 30% to 130,000 units.

Also suppose that for each Glucoscan monitor sold, GSI expects additional sales of $100 per year on glucose testing strips and these strips have a gross profit margin of 75%. These strip sales occur on all monitor sales regardless of the price of the monitor. Including the increase in the sale of testing strips, the incremental impact of this price drop on the firms EBIT is closest to:

Answer:

$720,000

Explanation:

Incremental Earnings Before Interest and Tax Analysis

Details Current price Reduced price

Units Sold 100,000 130,000

Unit sales price 129 99

Sales Revenue $12,900,000 $12,870,000

Cost of Goods sold at $50 5,000,000 $6,500,000

Gross Profit $7,900,000 $6,370,000

G. Profit on Strips sold at $75 $7,500,000 $9,750,000

Total Gross Profit for the year $15,400,000 $16,120,000

The Net benefit of this price change is increase of Earnings before interest and tax by $720,000.

3 0

3 years ago

Listed below are several transactions that typically produce either an increase or a decrease in cash. Indicate by letter whethe

satela [25.4K]

Answer:

a. Sale of Common Stock.

Classification: Financing activity

b. Sale of Land

Classification: Investing activity

c. Purchase of Treasury Stock

Classification: Financing activity

d. Merchandise Sales

Classification: Operating activity

e. Issuance of a long-term note payable

Classification: Financing activity

f. Purchase of merchandise

Classification: Operating activity

g. Repayment of note payable

Classification:

Financing activity

h. Employee salaries

Classification: Operating activity

i. Sale of equipment at a gain.

Classification: Investing activity

j. Issuance of bonds

Classification: Operating activity

5 0

3 years ago

Budgeted sales are: Month Sales revenue August $15,000 September $15,000 October $14,000 November $13,000 December $20,000 You c

stepladder [879]

Answer:

The budgeted cash inflows for October and November is $14,500 and $12,300 respectively

Explanation:

The computation of the budgeted cash inflows for October and November is shown below:

For October:

= 50% of sales revenue of October + 40% of sales revenue of September + 10% of August

= 0.5 × $14,000 + 0.40 × $15,000 + 0.10 × $15,000

= $7,000 + $6,000 + $1,500

= $14,500

For November

= 50% of sales revenue of November + 40% of sales revenue of October + 10% of September

= 0.5 × $13,000 + 0.40 × $14,000 + 0.10 × $15,000

= $5,200 + $5,600 + $1,500

= $12,300

3 0

3 years ago