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3 years ago

How could a line of credit negatively impact a business?

1 answer:

5 0

Bad credit, defined by FICO as a score of 300 to 629, is a common reason that lenders reject small-business loan applications. Borrowers with poor credit scores are considered at higher risk of defaulting on a loan. Still, even with bad credit, you have financing options, including online loans.

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Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 530,000 shares of stock outstand

Mumz [18]

Answer:

The difference is $9,450,000

Explanation:

Market Value of Share = $27.50 x 530,000

=$14,575,000

Book Value = $5,125,000.

Difference = $14,575,000- $5,125,000.

=$9,450,000

The market value is greater than book value by $9,450,000

5 0

3 years ago

You are evaluating two different silicon wafer milling machines. The Techron I costs $276,000, has a three-year life, and has pr

kramer

Answer:

Techron I

-$154,842

Techron II

-$144,981

Explanation:

Techron I

Cash Flow From Year 1 to Year 3

Pretax operating costs ($75,000)

Depreciation ($276,000 / 3) ($92,000)

Profit before tax ($167,000)

Tax (21% x $167,000) $35,070

Profit after tax ($131,930)

Add back Depreciation $92,000

Cash Flow after tax ($39,930)

Terminal Value = Salvage value - Tax = $52,000 - ($52,000 x 21%) = $41,080

NPV = ($276,000) + [ (39,930) x (1+12%)^-1] + [ (39,930) x (1+12%)^-2] + [ (39,930) x (1+12%)^-3] = ($276,000) + ($35,652) + ($31,832) + ($28,421) = ($371,905)

EAC = NPV/(1-(1+r)^-n)/r

EAC = -371,905 / ( 1 - ( 1 + 12% )^-3/12% = -$154,842

Techron II

Cash Flow From Year 1 to Year 3

Pretax operating costs ($48,000)

Depreciation ($480,000 / 5) ($96,000)

Profit before tax ($144,000)

Tax (21% x $167,000) $30,240

Profit after tax ($113,760)

Add back Depreciation $96,000

Cash Flow after tax ($17,746)

Terminal Value = Salvage value - Tax = $52,000 - ($52,000 x 21%) = $41,080

NPV = ($480,000) + [ (17,746) x (1+12%)^-1] + [ (17,746) x (1+12%)^-2] + [ (17,746) x (1+12%)^-3] = ($480,000) + ($15,845) + ($14,147) + ($12631) = ($522,623)

EAC = NPV/(1-(1+r)^-n)/r

EAC = -522,623 / ( 1 - ( 1 + 12% )^-5/12% = -$144,981

7 0

3 years ago

Sexton, Corp., has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 860 $ 940 $ 900 $ 1,000 Sales in the y

earnstyle [38]

Answer:

Q1 Q2 Q3 Q4

a. Payment of accounts ($) 258.00 282.00 270.00 300.00

b. Payment of accounts ($) 258.00 282.00 270.00 300.00

c. Payment of accounts ($) 258.00 282.00 270.00 300.00

Explanation:

Given:

Q1 Q2 Q3 Q4

Sales ($) 860 940 900 1,000

Therefore, we have:

a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

This is done as follows:

Q1 Q2 Q3 Q4

Order (30% of Sales) ($) 258.00 282.00 270.00 300.00

Payment of accounts ($) 258.00 282.00 270.00 300.00

b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

A 90-day payables period implies that the payment has be made within the next 90 days or within one quarter or the same quarter. Therefore, we have:

Q1 Q2 Q3 Q4

Order (30% of Sales) ($) 258.00 282.00 270.00 300.00

Payment of accounts ($) 258.00 282.00 270.00 300.00

c. Calculate payments to suppliers assuming a 60-day payables period.

A 60-day payables period implies the payment for the Order in each of the quarters has to be made in the same quarter.

Therefore, we have:

Q1 Q2 Q3 Q4

Order (30% of Sales) ($) 258.00 282.00 270.00 300.00

Payment of accounts ($) 258.00 282.00 270.00 300.00

Note:

It can be observed that the answer look the same for all the questions.

6 0

3 years ago

How can the military support your career goals

Setler [38]

Answer:

you can get money to further your education, also engage in stem activities.

Explanation:

4 0

3 years ago

Why are we forced to make choices in day-to-day life? we are forced to make choices in day-to-day life because of resources.

rewona [7]

We are forced to make choices in our day to day life because our resources are limited.

An example of this limited resources is our financial resources, we need to work to earn money to buy our necessities to live a comfortable life. Simply put, no work no pay. No pay, no food. No food, no life. So, no choice but work.

6 0

3 years ago

Read 2 more answers