Questions from Corporate Finance

Q: Use the financial statements supplied below and on the next page for

Use the financial statements supplied below and on the next page for International Motor Corporation (IMC) to answer the following questions: a. Calculate the cash conversion cycle for IMC for both 20...

Q: Your company had $10 million in sales last year. Its

Your company had $10 million in sales last year. Its cost of goods sold was $7 million and its average inventory balance was $1,200,000. What was its average days of inventory?

Q: Summit Builders has a market debt-equity ratio of 0.

Summit Builders has a market debt-equity ratio of 0.65 and a corporate tax rate of 40%, and it pays 7% interest on its debt. By what amount does the interest tax shield from its debt lower Summit’s WA...

Q: Happy Valley Homecare Suppliers, Inc. (HVHS), had $

Happy Valley Homecare Suppliers, Inc. (HVHS), had $20 million in sales in 2010. Its cost of goods sold was $8 million, and its average inventory balance was $2,000,000. a. Calculate the average numbe...

Q: Use the following income statement and balance sheet for Jim’s Espresso:

Use the following income statement and balance sheet for Jim’s Espresso: Assume that Jim’s pays out 90% of its net income. Use the percent of sales method to foreca...

Q: Sailboats Etc. is a retail company specializing in sailboats and other

Sailboats Etc. is a retail company specializing in sailboats and other sailing-related equipment. The following table contains financial forecasts as well as current (month 0) working capital levels....

Q: FastChips Semiconductors has inventory days of 75, accounts receivable days of

FastChips Semiconductors has inventory days of 75, accounts receivable days of 30, and accounts payable days of 90. What is its cash conversion cycle?

Q: Emerald City Umbrellas sells umbrellas and rain gear in Seattle, so

Emerald City Umbrellas sells umbrellas and rain gear in Seattle, so its sales are fairly level across the year. However, it is branching out to other markets where it expects demand to be much more va...

Q: Use the following income statement and balance sheet for Jim’s Espresso:

Use the following income statement and balance sheet for Jim’s Espresso: What is the amount of net new financing needed for Jim’s?

Q: What are the permanent working capital needs of your company? What

What are the permanent working capital needs of your company? What are the temporary needs?