Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hi :) can you please solve this Thank you! Chapter 4 Problem A.) Ingraham Inc. currently has $955,000 in accounts receivable, and its days sales

Hi :) can you please solve this Thank you!

Chapter 4 Problem

A.) Ingraham Inc. currently has $955,000 in accounts receivable, and its days sales outstanding (DSO) is 62 days. It wants to reduce its DSO to 35 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 25%. What will be the level of accounts receivable following the change? Assume a 365-day year. Round your answer to the nearest cent.

B.)Ingraham Inc. recently reported net income of $7 million. It has 600,000 shares of common stock, which currently trades at $41 a share. Ingraham continues to expand and anticipates that 1 year from now, its net income will be $8.75 million. Over the next year it also anticipates issuing an additional 180,000 shares of stock so that 1 year from now it will have 780,000 shares of common stock. Assuming Ingraham price/earnings ratio remains at its current level, what will be its stock price 1 year from now? Do not round intermediate calculations. Round your answer to the nearest cent.

C.) Precious Metal Mining has $16 million in sales, its ROE is 16%, and its total assets turnover is 4x. Common equity on the firms balance sheet is 75% of its total assets. What is its net income? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent. Do not round intermediate steps.

D.) You are given the following information: Stockholders' equity as reported on the firms balance sheet = $2.5 billion, price/earnings ratio = 14, common shares outstanding = 28 million, and market/book ratio = 2.2. Calculate the price of a share of the company's common stock. Round your answer to the nearest cent.

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

Step: 3

blur-text-image

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

The Venture Capital Investment Process

Authors: Darek Klonowski

1st Edition

0230612881, 023011007X, 9780230612884, 9780230110076

More Books

Students also viewed these Finance questions

Question

5. Have you any experience with agile software development?

Answered: 1 week ago