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Please show how to solve this question! Thanks in advance! Keown Corp. is planning its financing for a substantial investment of C$30 million next year.
Please show how to solve this question! Thanks in advance!
Keown Corp. is planning its financing for a substantial investment of C$30 million next year. The assumptions for Keown's plan are the following: - The total investment of C$30 million will be distributed as follows: C$5 million in receivables, C$5 million in inventory, and fixed capital investments of C$20 million, including C$5 million to replace depreciated equipment and C$15 million of net new investments. - Projections include a net income of C\$10 million, depreciation charges of C$5 million, and dividend payments of C$4 million. - Short-term financing from accounts payable of C$3 million is expected. The company will use receivables as collateral for another C$3 million loan. The company will also issue a C$4 million short-term note to a commercial bank. - Any additional external financing needed can be raised from an increase in long-term bonds. If additional financing is not needed, any excess funds will be used to repurchase common shares. How much, if any, does Keown need to issue in long-term Step by Step Solution
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