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Work done in Excel? PLEASE REVIEW ATTACHED DOCUMENTS 16-1 Williams & Sons last year reported sales of $10 million and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new system is able to reduce the firm?s inventory level and increase the firm?s inventory turnover ratio to 5 while maintaining the same level of sales, how much cash will be freed up? 16-2 Medwig Corporation has a DSO of 17 days. The company averages $3,500 in credit sales each day. What is the company?s average accounts receivable? 16-3 What is the nominal and effective cost of trade credit under the credit terms of 3/, net 30? 16-4 A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer , suppliers allow the firm to stretch its credit terms.) What is the retailer?s effective cost of trade credit? 16-5 A chain of appliance stores, APP Corporation, purchases inventory with a net price of $500,000 each day. The company purchases the inventory under the credit terms of 2/15, net 40. APP always takes the discount but takes the full 15 days to pay its bills. What is the average accounts payable for APP? **************************************************************************** Corporate Valuation DONE IN EXCEL/ WORDPAD WITH FULL WORK SHOWN The financial statements of Lioi Steel Fabricators are shown below?both the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6% rate after 2011. The weighted average cost of capital is 11%. a. If operating capital as of 12/31/2010 is $502.2 million, what is the free cash flow for 12/31/2011? b. What is the horizon value as of 12/31/2011? c. What is the value of operations as of 12/31/2010? d. What is the total value of the company as of 12/31/2010? e. What is the intrinsic price per share for 12/31/2010? Income Statements for the Year Ending December 31 (Millions of Dollars Except for Per Share Data


Paper#8551 | Written in 18-Jul-2015

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