bts high pront, low-risk, a low-profit, high-risk (c) a low-profit, high-risk; a high-profit, low-risk id) a low-profit, low.risk; a high-profit, high-risk in the cash conversion cycle 12. A decrease in the average age of inventory will result in (e) an increase i a decrease (e) an undetermined change (d) no change 13. Enert, inc.'s current capital structure is shown below. This structure is optimal, and the company wishes to maintain it. 25% 5% 70% Debt Preferred equity Common equity Enert's management is planning to build a $75 million facility that will be financed according fo this desired capital come from a new issue of common shares is structure. Currently, $15 million of cash is available for capital expansion. The percentage of the $75 million that will 5000% 8. 56.25%. c.7000s. . 14. larrett Enterprises is considering whether to pursue a restricted or relaxed current asset investment policy. The s annual sales are $400,000: its fixed assets are $100,000: debt and equity are each 50 percent of Hota) assets EDIT is $36,000, the interest rate on the firm's debt is 10 percent, and the firm's tax rate is 40 percent. with a f restricted policy, current assets will be 15 percent of sales" under a relaxed policy, current assets win be percent of sales. What is the difference in the projected ROEs between the restricted and relaxed policies? 3.8% d, 5.4% ty.'k 1.6% Questions 15 and 16 are based on the following information A company has a 10% cost of borrowing and incurs fixed costs of SS00 for obtaining a cash flows, and the estimated total amount of net new cash needed for transactions for the year is $175,000. The company does not hold safety stocks of cash. arn has sta edictable 15. When the average cash balance of the company is higher, the cList A> the cash balance is , List A Opportunity cost of holding Total transactions costs associated with obtaining Opportunity cost of holding Total costs of holding List 8 Higher Higher A. D. Lower 16. if the average cash balance for the company during the year is $20,916.50, the opportunity cost of cash for the year will be A. 52,091.65 A $209165$4 183 30 8,750 00 D. $17,500.00 $8,750.00 17. Every 15 days a company receives $10,000 worth of raw materials from its suppliers. The credit terms for these Thus, the company is interest rate on this purchases are 2/10, net 30, and payment is made on the 30th day after each delivery. considering a 1-year bank loan for $3.800 (98 loan is 12%, what will be the net dollar savings over the % of the invoice amount), if the effective annual i year by borrowing and then taking the discount on the materials? A $3,624 8. $1,176 C $4,800 D. $1,224 18. Your firm buys on credit terms of 2/10, net 45, and it always pays on Day 45. If you calculate that this policy effectively costs your firm $157,500 each year, what is the firm's average accounts payable balance? bts high pront, low-risk, a low-profit, high-risk (c) a low-profit, high-risk; a high-profit, low-risk id) a low-profit, low.risk; a high-profit, high-risk in the cash conversion cycle 12. A decrease in the average age of inventory will result in (e) an increase i a decrease (e) an undetermined change (d) no change 13. Enert, inc.'s current capital structure is shown below. This structure is optimal, and the company wishes to maintain it. 25% 5% 70% Debt Preferred equity Common equity Enert's management is planning to build a $75 million facility that will be financed according fo this desired capital come from a new issue of common shares is structure. Currently, $15 million of cash is available for capital expansion. The percentage of the $75 million that will 5000% 8. 56.25%. c.7000s. . 14. larrett Enterprises is considering whether to pursue a restricted or relaxed current asset investment policy. The s annual sales are $400,000: its fixed assets are $100,000: debt and equity are each 50 percent of Hota) assets EDIT is $36,000, the interest rate on the firm's debt is 10 percent, and the firm's tax rate is 40 percent. with a f restricted policy, current assets will be 15 percent of sales" under a relaxed policy, current assets win be percent of sales. What is the difference in the projected ROEs between the restricted and relaxed policies? 3.8% d, 5.4% ty.'k 1.6% Questions 15 and 16 are based on the following information A company has a 10% cost of borrowing and incurs fixed costs of SS00 for obtaining a cash flows, and the estimated total amount of net new cash needed for transactions for the year is $175,000. The company does not hold safety stocks of cash. arn has sta edictable 15. When the average cash balance of the company is higher, the cList A> the cash balance is , List A Opportunity cost of holding Total transactions costs associated with obtaining Opportunity cost of holding Total costs of holding List 8 Higher Higher A. D. Lower 16. if the average cash balance for the company during the year is $20,916.50, the opportunity cost of cash for the year will be A. 52,091.65 A $209165$4 183 30 8,750 00 D. $17,500.00 $8,750.00 17. Every 15 days a company receives $10,000 worth of raw materials from its suppliers. The credit terms for these Thus, the company is interest rate on this purchases are 2/10, net 30, and payment is made on the 30th day after each delivery. considering a 1-year bank loan for $3.800 (98 loan is 12%, what will be the net dollar savings over the % of the invoice amount), if the effective annual i year by borrowing and then taking the discount on the materials? A $3,624 8. $1,176 C $4,800 D. $1,224 18. Your firm buys on credit terms of 2/10, net 45, and it always pays on Day 45. If you calculate that this policy effectively costs your firm $157,500 each year, what is the firm's average accounts payable balance