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aksik [14]
3 years ago
15

A new firm is developing its business plan. It will require $565,000 of assets, and it projects $452,800 of sales and $354,300 o

f operating costs for the first year. Management is quite sure of these numbers because of contracts with its customers and suppliers. It can borrow at a rate of 7.5%, but the bank requires it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will call in the loan and the firm will go bankrupt. What is the maximum debt-to-assets ratio the firm can use
Business
1 answer:
lbvjy [14]3 years ago
6 0

Answer:

58.11%

Explanation:

Sales = $452,800

Operating costs= 354,300

Operating Income (EBIT) = $98,500

TIE= 4.00

Maximum interest expense= EBIT/TIE= $24,625

Interest rate= 7.50%

Max. debt =Max interest/Interest rate = $328,333

Maximum debt ratio=Debt/ Assets= 58.11%

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Answer:

185 teddy bears are in work in progress inventory

Explanation:

given data

receives order = 250 teddy bears

fabric = 300 yards

ribbon = 200 yards

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how many teddy bears can be considered work-in-process inventory

solution

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so finished and this comes under finished goods inventory are

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3 0
3 years ago
Assume that interest rates on 20-year Treasury and corporate bonds with different ratings, all of which are noncallable, are as
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Answer:

The question is missing the options which are below:

A Real risk-free rate differences.  

B Tax effects.  

C Default risk differences.  

D Maturity risk differences.  

E Inflation differences.  

The correct answer is option C,default risk differences.

Explanation:

Default risk is the increase in return given to an investor to compensate the investor for the likely losses that may arise due to the inability of the borrower to make funds available to the investor on the maturity date or even in required amount.

Different debt instruments have different default risk depending on their credit rating as rated by international rating agencies.Such rating is a function of many factors,which includes:

Balance sheet position

Profitability

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Macro-economic factors and some others.

Liquidity refers to the ability of the company to settle obligations such as repayment of bonds and interest  when due.

Invariably,liquidity has a higher impact in determining credit rating as well as default risk of an instrument.

3 0
3 years ago
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N76 [4]

Answer:

C

Explanation:

Affective component has been displayed as mood and feelings have been touched as a result of the feedback Janice got from her boss.

Cheers

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3 years ago
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Answer:

the unemployment rate

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The answer is that " they help politicians win support from their constituents".

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