LIZ'S Health Food Store has estimated monthly financing requirements for the next six months as follows: January February March $9,400 3,400 4,400 April May June 59,400 10,400 5,400 Short-term financing will be utilized for the next six months. Projected annual interest rates are January February March 8.0April 9.0% May 12.0% June 15.0% 12.0% 12.0% Complete the table below and using the data computed, what is the expected annual rate of the short-term financing? Hint Divide the total interest payments by the total amount of funds extended and multiply by 12 (Round Intermediate calculations and final answers to 2 decimal places.) Rate Month January February March Apeli May June Short-term Financing On monthly basis Amount 39,400 $3,400 $4,400 $9,400 $10,400 $5,400 Actual Interest amount 5 $ $ $ 5 $ Annual interest rate Bondage Supply Company expects sales next year to be $470,000 Inventory and accounts receivable will have to be increased by $65,000 to accommodate this sales level. The company has a steady profit margin of 10 percent, with a 40 percent dividend payout. How much external funding will Bondage Supply Company have to seek? Assume there is no increase in labinties other than that which will occur with the external financing External funds needed $ The Boswell Corporation forecasts its sales in units for the next four months as follows: March April May June 20,000 22,000 19. sea 18,000 Boswell maintains an ending inventory for each month in the amount of two and one-half times the expected sales in the following month. The ending inventory for February (March's beginning inventory reflects this policy. Materials cost $7 per unit and are paid for in the month after production Labour cost is $11 per unit and is paid for in the month incurred. Fixed overhead is $19.000 per month Dividends of $21,400 are to be paid in May. Nineteenthousand units were produced in February a. Complete a production schedule for March April, and May (Enter all values os positive value.) Boswell Corporation Production Schedule March April May June Forecasted unit Sales Desired ending inventory Beginning inventory Units to be produced b. Complete a summary of cash payments for March April, and May Boswell Corporation Cash Payments February March April Units produced Materials Labour Fixed overhead Dividends Total cash payments Sherlock Homes, a manufacturer of low-cost mobile housing, has 54,900,000 in assets. Temporary current assets Permanent current assets Capital assets 51,080,000 1,660, eee 2,168,000 54,900,000 Total assets Short-term rates are 12 percent Long-term rates are 8 percent. (Note that long-term rates imply a return to any equity) Earnings before Interest and taxes are $1,040.000. The tax rate is 40 percent. Assume the term structure of interest rates becomes Inverted, with short term rates going to 12 percent and long-term rates 4 percentage points lower than short-term rates Ilong-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing what will earnings be after taxes? For an example of perfectly hedged plans see Figure 6-8 Earning after taxes $ Mervyn's Fine Fashion has an average collection period of 30 days. The accounts receivable balance is $45,000. What is the value of credit sales? Use 365 days in a year. Round the final answer to the nearest whole dollar.) Credit sales Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $170,000 if credit is extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 4 percent of sales and production and selling costs will be 76 percent of sales. o. Compute the incremental income before taxes. Incremental income before taxes b. What will the firm's Incremental return on sales be if these new credit customers are accepted? (Round the final answer to 2 decimal place.) Incremental return on sales % c. If the receivable turnover ratio is 3 to 1, and no other asset buildup is needed to serve the new customers, what will Johnson Electronics' incremental return on new average Investment be? (Do round Intermediate calculations. Round the final answer to the nearest whole percentage.) Incremental return on new average Investment 96 Aurora Electrical Company of Yellowknife ships wind turbines throughout the country. Mr. Beam, the financial manager, has determined that through the establishment of local collection centres around the country, he can speed up the collection of payments by three days. Furthermore, the cash management department of the company's bank has indicated to him that he can defer payments on his accounts by one day without offending suppliers. The bank has a remote disbursement centre in New Brunswick a. If Aurora Electrical Company has $275 million per day in collections and $115 million per day in disbursements, how many dollars will the cash management system free up? (Enter the answer in dollars not in millions.) Freed-up funds $ b. If Aurora Electrical Company can earn 6% percent per annum on freed-up funds, how much income can be generated? (Enter the answer in dollars not in millions.) Interest on freed-up cash $ c. If the total cost of the system is $450,000 should it be implemented? Yes O No