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nexus9112 [7]
3 years ago
9

It is January 2nd. Senior management of Digby meets to determine their investment plan for the year. The current long-term debt

is equal to $33,862,062. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (Assets/Equity) to a new target of 2.45. Assume the stock can be issued at yesterday's stock price $20.54.
Which of the following statements are true? (Select 2 answers)
A) Total investment for Digby will be $2,518,806
B) Total Assets will rise to $140,042,395
C) Digby bond issue will be $48,116
D) Long term debt will increase from $33,862,062 to $34,888,934
E) Digby will issue stock totaling $1,026,872
F) Digby working capital will be unchanged at $14,847,979
Business
2 answers:
atroni [7]3 years ago
6 0

Answer:

A) Total investment for Digby will be $2,518,806

D) Long term debt will increase from $33,862,062 to $34,888,934

Explanation:

The current Long-term debt is $33,862,062

Digby issues new shares of 50,000 with stock price $20.54.

50,000 shares * $20.45 = $1,027,000

Assets of Digby will rise by,

Assets / Equity = 2.45

Assets / $1,027,000 = 2.45

Assets = 2.45 * $1,027,000

Assets = $2,516,150

spayn [35]3 years ago
6 0

Answer:

E, F

Explanation:

1) The working capital remain unchanged as new stock issue and the the share issues are purposely to fund the purchase of plant and equipment. Please note that the components of working capital which are cash , inventory , receivable and payable are not affected by this.

2)The total share stock issued issued  is close to 1,026,872. (50000*20.54)

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. In the context of sourcing, multiple suppliers: a. often provide the ability to form close partnerships. b. often provide econ
Galina-37 [17]

Answer:

c. lower the risk of supply disruption

Explanation:

Having multiple suppliers is always a good sourcing strategy, as it <u>minimizes the risk of supply disruption</u>. If one of the suppliers fails to maintain the contract due to various reasons (bad business operating), the risk is dispersed among a few suppliers, so there is the contingency principle applied.

This way, the supply chain never gets disrupted.

6 0
3 years ago
Bill received an unordered calendar from the local charity so he must pay money to the charity.
torisob [31]

Answer:

false, they sent the calendar hoping he would make a donation, but he does not have to give any money

Explanation:

they sent the calendar hoping he would make a donation, but he does not have to give any money

8 0
3 years ago
In 2010, us nominal gdp was estimated to be $14.657 trillion dollars while the real gdp was estimated to be $13.245 trillion. wh
Tcecarenko [31]

Answer:

Nominal gross domestic product (GDP) measures the market value of all the new and legal goods and services produced in a country within a year. While real GDP adjusts nominal GDP to inflation. Since inflation is generally positive, real GDP decreases as inflation increases. The higher the inflation rate, the larger the difference between nominal and real GDP. Depending on which year is used as base year (year 0), the difference that existed in 2010 can be either significant or not.

The difference = ($14,657 / $13,245) - 1 = 10.66%, which means that nominal GDP was 10.66% higher than real GDP. If the base year is 2000 or even 2005/6, the difference is very small since the accumulated inflation would only be 10.66% for all these years. But if the base year was 2008 or even 2009, then the inflation rate is high.

8 0
2 years ago
During January, LexPro Co., which maintains a perpetual inventory system, recorded the following information pertaining to its i
diamong [38]

Answer:

$3,225

Explanation:

The computation of the amount reported as an ending inventory is shown below:

Date Particulars Units   Cost Amount                

1 -1        Op Balance     1,000         $1            $1,000  

1 -7         Purchases      600          $3             $1,800

Total                              1,600    $1.75         $2,800  

                                              ($2,800 ÷ 1,600 units)  

1 -20 COGS           900      $1.75            $1,575

Total                              700     $1.75            $1,225

1 -25       Purchases     400     $5                 $2,000

Ending inventory         1,100    $2.9318       $3,225

                                                  ($3,225 ÷ 1,100 units)  

We simply added the purchase units with the opening balance and deduct the cost of goods sold units from the opening balance so that the correct ending inventory amount could arrive

3 0
3 years ago
The net cash flow from operating activities is an inflow of $47,042, the net cash flow from investing activities is an outflow o
Alex_Xolod [135]

Answer:

$9,097

Explanation:

Net cash flow from operating activities = + $47,042

Net cash flow from investing activities = -  $21,831

Net cash flow from financing activities = -  $28,397

Net cash flows for the period                =  - $3,186

Beginning cash account balance          =   $12,283

Net cash flows for the period                =  - $3,186

Ending cash balance                             =    $9,097

5 0
3 years ago
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