Question Details

FIN 571 Week 3 Connect Problems

Complete the Week 3 Connect problems
 1.
 
If the Hunter Corp. has an ROE of 16 and a payout ratio of 24 percent, what is its sustainable growth rate?(Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
 
 

 2.
 
The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes):
 
Income Statement	 	Balance Sheet	 
  Sales	$	8,200	 	  Assets	$	24,600	 	  Debt	$	12,000	 
  Costs	 	5,860	 	 	 	 	 	  Equity	 	12,600	 
 	________________________________________	________________________________________	 	 	________________________________________	________________________________________	 	 	________________________________________	________________________________________	 
    Net income	$	2,340	 	    Total	$	24,600	 	    Total	$	24,600	 
 	________________________________________________________________________________	________________________________________________________________________________	 	 	________________________________________________________________________________	________________________________________________________________________________	 	 	________________________________________________________________________________	________________________________________________________________________________	 
________________________________________
 
Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year- sales are projected to be $9,102.
 
What is the external financing needed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
 
  External financing needed	$    


3.
The maximum rate at which a firm can grow while maintaining a constant debt-equity ratio is best defined by its:

4.
Which account is least apt to vary directly with sales?

 5.
 
 
Marcie's Mercantile wants to maintain its current dividend policy, which is a payout ratio of 35 percent. The firm does not want to increase its equity financing but is willing to maintain its current debt-equity ratio. Given these requirements, the maximum rate at which Marcie's can grow is equal to:



 6.
The sustainable growth rate will be equivalent to the internal growth rate when, and only when,:


7.
In the financial planning model, the external financing needed (EFN) as shown on a pro forma balance sheet is equal to the changes in assets:


8.
The extended version of the percentage of sales method:


9.
One of the primary weaknesses of many financial planning models is that they:


10.
Which one of the following depicts a correct relationship?


11.
Financial planning, when properly executed:


 12.
Projected future financial statements are called:

 13.
 
The credit period begins on the:


 14.
Selling goods and services on credit is:


15.
 
The minimum level of inventory that a firm wants to keep on hand at all times is referred to as:


16.
 
The most common means of financing a temporary cash deficit is a:


 17.
The cash cycle is defined as the time between:


 18.
Given a fixed level of sales and a constant profit margin, an increase in the accounts payable period can result from:

 19.
The three components of credit policy are:


 20.
All of the following can provide credit information about a customer except:


 21.
Since the credit decision usually includes riskier customers, the decision should adjust for this by:

 22.
 
When credit is granted to another firm this gives rise to a(n):


 23.
Brown- Market currently has an operating cycle of 76.8 days. It is planning some operational changes that are expected to decrease the accounts receivable period by 2.8 days and decrease the inventory period by 3.1 days. The accounts payable turnover rate is expected to increase from 9 to 11.5 times per year. If all of these changes are adopted, what will be the firm's new operating cycle?


 24. 
 
Jordan and Sons has an inventory period of 48.6 days, an accounts payable period of 36.2 days, and an accounts receivable period of 29.3 days. Management is considering offering a 5 percent discount if its credit customers pay for their purchases within 10 days. This discount is expected to reduce the receivables period by 17 days. If the discount is offered, the operating cycle will decrease from ___ days to ___ days.



 25.
On average, D & M sells its inventory in 37 days, collects on its receivables in 3.4 days, and takes 35 days to pay for its purchases. What is the length of the firm- operating cycle?



 26.
A firm has an inventory turnover rate of 15.7, a receivables turnover rate of 20.2, and a payables turnover rate of 14.6. How long is the cash cycle?
rev: 05_12_2016_QC_CS-51572