7 If the net book value of PP&E is 60, the closing balance of accumulated depreciation is 60, the gross cost of disposals is 10 and the opening gross cost of PP8E is 100, what is the gross cost of acquisitions? 90 20) 120 30 8 PP&E disposals can be forecast based on the historic relationship between Cost of sales and opening PP&E accumulated depreciation Revenues and the net book value of PP&E The gross cost of opening PP&E and the gross cost of disposals The gross cost of disposals and changes in working capital 9 If you don't need to forecast debt levels as a multiple of equity, the low complexity approach to modeling debt involves Assuming long term debt is constant Forecasting debt from first principles Using average debt to calculate interest Using closing debt to calculate interest 10 How do we know what the split between equity and debt financing should be? Use financial covenants in loan agreements Consider management willingness to take on debt Use the current splibeeneguit and detbe finance Use all of the above 11 Forecasting finance includes ALL of the following EXCEPT Cash Short term debt Retained earnings Accounts receivable 12 Which of the following is a Coverage Ratio? Total assets to equity Total debt to capital employed Total debt to equity EBIT to interest