Problem 15.08 – Rentz Corporation
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition and 10th Edition
Compute the expected return on equity under each current assets level.
Compute the expected return on equity under each current assets level.
Determine the amount of free cash that FGC would make from the lockbox system, the annual worth of the lockbox system, and the monthly charge FGC should pay for the lockbox system.
Use the AFN equation to forecast the additional funds Carlsbad will need.
Given the sales, inventories, receivables, payables, COGS, and loan rate… determine the cash conversion cycle (CCC), the new CCC if the firm were to lower its inventories and receivables, the amount of cash freed up, and the amount by which pretax profits would change.
Use the AFN equation to predict the additional funds needed for the coming year.
Given sales, payment days, and accounts receivable… determine the DSO, and the amount of capital that would be released if the firm were able to take actions that would lead to on-time payments from customers.
What additional funds would be needed for the coming year given that the firm doesn’t pay dividends?
Given materials, terms, bank loan rate, and compounding period… find how much additional credit he could get, calculate the nominal cost and effective cost of trade credit, and compare bank debt to forgoing the discounts.
Calculate the projected net income and expected growth in dividends.
Given the inventory, collection, and payables deferral periods… determine the cash conversion cycle, the investment in accounts receivable, and inventory turnover.