it is january 2nd and senior leadership at the jasper corporation meets to determine their investment plan for the year. The team decides to fully fund an equipment purchase of 50,000 shares of stock plus a new bond issue. The CFO notes this will raise their leverage (assets/equity) to a new target of 3.39. Assume the stock can be issued at yesterday's stock price of $35.55. Which of the following statements is accurate?
A. Jasper Corporation's long term debt will increase from $4,692,849.60 to $6,470,350.00
B. Total Investment for Jasper Corporation will be $4,253,667.91
C. Jasper Corporation will issue stock totaling $1,777,500.00
D. Jasper Corporation's bond issue will be $69,653.11
E. None of the above
Balance Sheet Assets Cash $ 7,657,880 Accounts Receivable $ 6,712,979 Inventory $ 4,061,061 Total Current Assets $ 18,431,921 Plant And Equipment $ 4,872,020 Accumulated Depreciation $ 6,158,595 Total Fixed Assets $ 11,030,615 Total Assets $ 29,462,536 Liabilities & Owners' Equity Accounts Payable $ 5,116,025 Current Debt $ 7,342,014 Long Term Debt $ 4,692,850 Total Liabilities $ 17,150,889 Common Stock $ 5,111,110 Retained Earnings $ 7,200,537 Total Equity $ 12,311,647 Total Liabilities And Equity $ 29,462,536 Cash Flow Sheet Starting Cash $ 1,092,898 Cash From Operations Net Income (Loss) $ 4,842,210 Adjustment For Non-Cash Items Depreciation $ 2,709,119 Extraordinary gains/losses/writeoffs $ 25,530 Changes in current assets and liabilities Accounts Payable $ 66,419 Inventory $ 91,776 Accounts Receivable $ 79,241 Net Cash From Operations $ 7,814,296 Cash From Investing Plant Improvements $ (462,123) $ (462,123) Net Cash From Investing Cash From Financing Dividends Paid $ (30,348) Common Stock Sales $ -- Common Stock Purchases $ (94,134) Bond Sales $ 523,248 Bond Purchases $ -- Change In Current Debt $ 222,384 Net Cash From Financing $ 621,150 Net Change In Cash $ 7,973,323 Closing Cash Postion Postion $ 9,066,221 $ 9,066,221 Income Statement Juice Jump Total Sales $ 22,937,784 $ 26,182,975 $ 49,120,759 Variable Costs Direct Labor Cost $ 8,136,789 $ 9,287,966 $ 17,424,755 Direct Material Cost $ 7,314,983 $ 8,349,892 $ 15,664,875 Interest Costs $ 129,459 Total Variable Costs $ 16,841,724 $ 19,224,457 $ 36,066,181 $ 13,054,578 Contribution Margin $ 6,096,060 $ 6,958,518 Period Costs Depreciation $ 1,265,070 $ 1,444,049 $ 2,709,119 SG&A R&D Cost $ 241,836 $ 276,050 $ 517,886 Promotion Budget $ 321,247 $ 366,697 $ 687,944 Sales Budget $ 309,443 $ 353,222 $662,664 Administrative Overhead $ 204,502 $ 233,435 $ 437,937 Total Period Costs $ 2,342,098 $ 2,673,453 $ 5,015,551 Net Margin $ 3,753,962 $ 4,285,065 $ 8,039,027 Other (Fees/Write-offs/Bonuses/Relocation) $ 307,983 EBIT $ 7,731,045 $ 2,660,555 Profit Sharing Cost $ 98,821 Net Profit $ 4,842,210 Balance Sheet Assets Cash $ 7,657,880 Accounts Receivable $ 6,712,979 Inventory $ 4,061,061 Total Current Assets $ 18,431,921 Plant And Equipment $ 4,872,020 Accumulated Depreciation $ 6,158,595 Total Fixed Assets $ 11,030,615 Total Assets $ 29,462,536 Liabilities & Owners' Equity Accounts Payable $ 5,116,025 Current Debt $ 7,342,014 Long Term Debt $ 4,692,850 Total Liabilities $ 17,150,889 Common Stock $ 5,111,110 Retained Earnings $ 7,200,537 Total Equity $ 12,311,647 Total Liabilities And Equity $ 29,462,536 Cash Flow Sheet Starting Cash $ 1,092,898 Cash From Operations Net Income (Loss) $ 4,842,210 Adjustment For Non-Cash Items Depreciation $ 2,709,119 Extraordinary gains/losses/writeoffs $ 25,530 Changes in current assets and liabilities Accounts Payable $ 66,419 Inventory $ 91,776 Accounts Receivable $ 79,241 Net Cash From Operations $ 7,814,296 Cash From Investing Plant Improvements $ (462,123) $ (462,123) Net Cash From Investing Cash From Financing Dividends Paid $ (30,348) Common Stock Sales $ -- Common Stock Purchases $ (94,134) Bond Sales $ 523,248 Bond Purchases $ -- Change In Current Debt $ 222,384 Net Cash From Financing $ 621,150 Net Change In Cash $ 7,973,323 Closing Cash Postion Postion $ 9,066,221 $ 9,066,221 Income Statement Juice Jump Total Sales $ 22,937,784 $ 26,182,975 $ 49,120,759 Variable Costs Direct Labor Cost $ 8,136,789 $ 9,287,966 $ 17,424,755 Direct Material Cost $ 7,314,983 $ 8,349,892 $ 15,664,875 Interest Costs $ 129,459 Total Variable Costs $ 16,841,724 $ 19,224,457 $ 36,066,181 $ 13,054,578 Contribution Margin $ 6,096,060 $ 6,958,518 Period Costs Depreciation $ 1,265,070 $ 1,444,049 $ 2,709,119 SG&A R&D Cost $ 241,836 $ 276,050 $ 517,886 Promotion Budget $ 321,247 $ 366,697 $ 687,944 Sales Budget $ 309,443 $ 353,222 $662,664 Administrative Overhead $ 204,502 $ 233,435 $ 437,937 Total Period Costs $ 2,342,098 $ 2,673,453 $ 5,015,551 Net Margin $ 3,753,962 $ 4,285,065 $ 8,039,027 Other (Fees/Write-offs/Bonuses/Relocation) $ 307,983 EBIT $ 7,731,045 $ 2,660,555 Profit Sharing Cost $ 98,821 Net Profit $ 4,842,210
