Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Glass Blowers, Inc. has a new project in mind that will increase accounts receivable by $11,000, decrease accounts payable by $6,000, increase fixed assets by

image text in transcribed

Glass Blowers, Inc. has a new project in mind that will increase accounts receivable by $11,000, decrease accounts payable by $6,000, increase fixed assets by $6,000, decrease inventory by $18,000 and decrease long-term debt by $10,000. What is the amount the firm should use as the initial cash flow attributable to net working capital when it analyzes this project? (Numbers in parentheses are negative) O ($41,000) $1000 O ($9000) O ($17,000) ($35,000) Question 2 5 pts Our firm's capital structure based on market values is 30% debt and 70% equity. The firm's before tax cost of debt is 5%, its cost of equity is 10%, and its tax rate is 40%. Currently, the target value weight of debt is 40% and the target value weight of equity is 60%. What would be the firm's weighted average cost of capital (WACC) based on this information? 7.20% 8.75% 8.25% 7.90% 8.50%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Behavioral Finance Psychology Decision-Making and Markets

Authors: Lucy Ackert

1st edition

324661177, 978-0538752862, 538752866, 978-1111781675, 1111781672, 978-1133455486, 978-0324661170

More Books

Students also viewed these Finance questions

Question

=+LO3 Understand how money management in the international business

Answered: 1 week ago

Question

How many bytes a char data type occupies?

Answered: 1 week ago

Question

The intermediate code is referred to as?

Answered: 1 week ago

Question

A loop with in another loop is called a ?

Answered: 1 week ago

Question

Java interpreter is also known as ?

Answered: 1 week ago

Question

Which purpose a construction is used?

Answered: 1 week ago