1. It is January 2nd. Senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (Assets/Equity) to a new target of 2.34. Assume the stock can be issued at yesterday's stock price $19.71. Which of the following statements are true? (Select 2 answers) Digby will issue stock totaling $985,445 Total investment for Digby will be $2,301,831 Long term debt will increase from $35,473,142 to $36,458,587 Total Assets will rise to $151,301,570 Digby working capital will be unchanged at $24,181,971 Digby bond issue will be $43,433

2. Cake is a product of the Chester Company. Chester's sales forecast for Cake is 1,451 in the Americas region. Chester wants to have an extra 10% on hand above their forecasted units in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Cake's Fulfillment After Adjustment have to be in order to have a 10% reserve of units available for sale? All numbers in thousands (000). 1,597 units 1,227 units 1,451 units 1,082 units

3. Baldwin plant has a capacity of 4,000,000 and an automation level of 4.5. Last year they produced 3,575,401 units of Baker - producing 2,475,401 and outsourcing 1,100,000 units. Which of the following would help Baldwin minimize capital spending this year? Purchase 1,600,000 units of capacity Raise Automation to 7.0 Purchase 2,100,000 units of capacity Outsource 1,600,000 units of capacity