Questions from Corporate Finance

Q: Table 29.11 shows Dynamic Mattress’s year-end 2016 balance

Table 29.11 shows Dynamic Mattress’s year-end 2016 balance sheet, and Table 29.12 shows its income statement for 2017. Work out the statement of cash flows for 2017. Group these item...

Q: In fiscal 2017 and 2016, Estée Lauder’s financial statements included the

In fiscal 2017 and 2016, Estée Lauder’s financial statements included the following items. What was its cash cycle?

Q: a. Paymore places orders for goods equal to 75% of

a. Paymore places orders for goods equal to 75% of its sales forecast for the next quarter. What will orders be in each quarter of the coming year if the sales in the current quarter are expected to b...

Q: Each of the following events affects one or more tables in Sections

Each of the following events affects one or more tables in Sections 29-2 and 29-3. Show the effects of each event by adjusting the tables listed in parentheses: a. Dynamic repays only $10 million of s...

Q: Construct a new model for Dynamic Mattress based on your answer to

Construct a new model for Dynamic Mattress based on your answer to Problem 19. Does your model generate a feasible financial plan for 2019? (Hint: If it doesn’t, you may have to allow the firm to issu...

Q: Table 29.15 summarizes the 2019 income statement and end year

Table 29.15 summarizes the 2019 income statement and end year balance sheet of Drake’s Bowling Alleys. Drake’s financial manager forecasts a 10% increase in sales and costs in 2020. The ratio of sales...

Q: Abbreviated financial statements for Archimedes Levers are shown in Table 29.

Abbreviated financial statements for Archimedes Levers are shown in Table 29.16. If sales increase by 10% in 2018 and all other items, including debt, increase correspondingly, what must be the balanc...

Q: The financial statements of Eagle Sport Supply are shown in Table 29

The financial statements of Eagle Sport Supply are shown in Table 29.17. For simplicity, “Costs” include interest. Assume that Eagle’s assets are proportional to its sales. a. Find Eagle’s required ex...

Q: Take a look at Figure 30.1. Why do food

Take a look at Figure 30.1. Why do food stores hold large inventories? Why do railroads hold small inventories? Why do you think that pharmaceutical companies hold so much cash and securities? Answer...

Q: Explain how incentive and agency problems might contribute to mispricing of securities

Explain how incentive and agency problems might contribute to mispricing of securities or to bubbles. Give examples.