Paper , Order, or Assignment Requirements
After seeing the tremendous popularity of the Ziptrekzipline in Vancouver during the Winter Olympics, a Toronto company is planning to build a similar attraction. $12,000,000 in new capital will be required. Currently,the financial structure of the company includes:
$3,000,000 of 6% bonds
$5,000,000 of 7% cumulative preferred stock
3 million shares of common stock at a book value of $12,000,000
Retained earnings of $900,000.
The following three alternatives can be used to provide the $12,000,000 required for the project.
i) $8 million in 5.5% bonds and $4 million in common stock at $12.50/share
ii) $10 million in 5.6% bonds and $2 million in 7.5% cumulative preferred
iii) $12 million in 5.7% bonds.
The company has forecasted earnings before taxes for 2010 of $4,000,000. The firms tax rate is 50%. Which alternative should they choose and why?
2.) Prepare a cash budget for Champion Limited for the months of June, July, and August, 2010. The firm wishes to maintain, at all times, a minimum cash balance of $55,000. Determine whether or not borrowing will be necessary during the period and, if it is, when and for how much. Also assume that any excess cash balances at month-end will be used to pay down any borrowing from previous months. As of May 31, the firm had a cash balance of $62,000
Actual Sales Forecasted Sales
April $ 80,000 June $50,000
May $140,000 July $39,000
Accounts Receivable: All sales are made on account. 60% of accounts receivable are collected in the month of sale, 30% in the next month, and 10% in the next month.
Purchases: 40% of each months sales. 50% paid in the month of occurrence, 30% in the following month, and 20% in the next month.
Proceeds from sale of property: $25,000 cash sale received in July.
Selling and administrative expenses: $14,000 per month
Interest payments on long-term debt: $20,000 due to be paid on July 15.
Dividends: $4,000 paid on August 3
Capital expenditures for new equipment: $60,000 in June, $20,000 in August.
Taxes: $2,000 due in July.
This question first appeared on Write My Essay
The post Accounting Decision Making Essay Dissertation Research Help appeared first on Write my Essay | I need help with my School Assignment.
Looking for solution of this Assignment?
WHY CHOOSE US?
We deliver quality original papers
|Our experts write quality original papers using academic databases.|
|We offer our clients multiple free revisions just to ensure you get what you want.|
|All our prices are discounted which makes it affordable to you. Use code FIRST15 to get your discount|
|We deliver papers that are written from scratch to deliver 100% originality. Our papers are free from plagiarism and NO similarity|
|We will deliver your paper on time even on short notice or short deadline, overnight essay or even an urgent essay|