La percent of revenues, for an autoparts capital 4. You have been asked to estimate the optimal working manufacturing firm that currently maintains net working capital of 10% of revenues. The firm cut- rently has revenues of S100 million and after-tax oper ating income of $10 million, and it expects the latter to grow 5% a year in perpetuity. The current cost of capital is 11%. The following table provides estimates of growth and costs of capital at different levels of working capital, ranging from 0% to 100%; Working Capital as % of Cost of Capital Revenue 0 10 20 30 40 50 60 70 80 90 100 Expected Growth (%) 4.75 5.00 5.20 5.35 5.45 5.50 5.54 5.55 5.55 5.55 5.55 10.90 11.00 11.11 11.23 11.36 11.50 11.65 11.80 11.95 12.10 12.35 Refer to Chapter 13, Problem 4. The value of the firm at the current working capital ratio is $175. This statement is: O True False Refer to Chapter 13, Problem 4. The optimal working capital ratio is 20%. This statement is: O True False Refer to Chapter 13, Problem 4. Assume the cost of capital will be unaffected by a change in the working capital policy (the cost of capital will remain at 11%). The optimal working capital ratio is now 20%. This statement is: True O O False La percent of revenues, for an autoparts capital 4. You have been asked to estimate the optimal working manufacturing firm that currently maintains net working capital of 10% of revenues. The firm cut- rently has revenues of S100 million and after-tax oper ating income of $10 million, and it expects the latter to grow 5% a year in perpetuity. The current cost of capital is 11%. The following table provides estimates of growth and costs of capital at different levels of working capital, ranging from 0% to 100%; Working Capital as % of Cost of Capital Revenue 0 10 20 30 40 50 60 70 80 90 100 Expected Growth (%) 4.75 5.00 5.20 5.35 5.45 5.50 5.54 5.55 5.55 5.55 5.55 10.90 11.00 11.11 11.23 11.36 11.50 11.65 11.80 11.95 12.10 12.35 Refer to Chapter 13, Problem 4. The value of the firm at the current working capital ratio is $175. This statement is: O True False Refer to Chapter 13, Problem 4. The optimal working capital ratio is 20%. This statement is: O True False Refer to Chapter 13, Problem 4. Assume the cost of capital will be unaffected by a change in the working capital policy (the cost of capital will remain at 11%). The optimal working capital ratio is now 20%. This statement is: True O O False