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FIN 571 Week 3 Quiz




Question;FIN 571 Week 3 Quiz;1. You are provided the following working;capital information for the Ridge Company;Ridge Company;Account;$;Inventory;$12,890;Accounts receivable;12,800;Accounts payable;12,670;Net sales;$124,589;Cost of goods sold;99,630;Operating cycle: What is the operating cycle for Ridge Company?;2. The operating cycle;3. Ticktock Clocks sells 10,000 alarm clocks each;year. If the total cost of placing an order is $65 and it costs $85 per year to;carry the alarm clock in inventory, use the EOQ formula to calculate the;optimal order size.;4. The asset substitution problem occurs when;5. Dynamo Corp. produces annual cash flows of $150 and;is expected to exist forever. The company is currently financed with 75 percent;equity and 25 percent debt. Your analysis tells you that the appropriate;discount rates are 10 percent for the cash flows, and 7 percent for the debt.;You currently own 10 percent of the stock.;How much are your cash flows today?;6. Melba's Toast has a capital structure with 30% debt;and 70% equity. Its pretax cost of debt is 6%, and its cost of equity is 10%.;The firm's marginal corporate income tax rate is 35%. What is the appropriate;WACC?;7. According to the text, the financial plan covers a;period of;8. The financing plan of a firm will indicate;9. Tradewinds Corp. has revenues of $9,651,220, costs;of $6,080,412, interest payment of $511,233, and a tax rate of 34 percent. It;paid dividends of $1,384,125 to shareholders. Find the firm's dividend payout;ratio and retention ratio.


Paper#47595 | Written in 18-Jul-2015

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