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please solve this question Question Ne: 1 Taxco Corporation is operating business financial planning, good practice of finan operating business in oil industry in Oman.
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Question Ne: 1 Taxco Corporation is operating business financial planning, good practice of finan operating business in oil industry in Oman. The oil industry requires til ood practice of financial and accounting records and well-developed financial or to raise finance. The CEO and his team are paying attention to the operations location of resources. Presented below are information derived from the me Corporation in 2019: Fixed Assets - $65,000,000 Long-term Investment - 0.10 FA FA=0.58 TA Intangible Assets = 0.05 FA Financial Leverage = 60% Long-term Liabilities = 65% TL ROTA in 2019 -17% The financial plan for the year 2020 is built around the following: Change in FA -20% - Change in NWC = 14% - Profit Retention Rate 48% - ROTA in 2020 = 120 percent of ROTA in 2019 - New stock issued should not exceed 12% of 2019 equity. - Depreciation rate of FA = 16% Required: a. Based on the EFM, provide a recap on the company profile in relation to change of financial scene and the possible effects on capitalization, liabilities and equity. b. What would be the case if the Corporation increases change in FA by 40% and NSI by 24%; other things remain the same. c. What would be the effect on Retained Earning portion if the DPR reduced by 17 percent. d. As an executive, what type of advice that you could give to the Top Management Team if the NWC is minus, no change in FA and profit retention is 100 percent as spelled out by the EFM model. Question Ne: 1 Taxco Corporation is operating business financial planning, good practice of finan operating business in oil industry in Oman. The oil industry requires til ood practice of financial and accounting records and well-developed financial or to raise finance. The CEO and his team are paying attention to the operations location of resources. Presented below are information derived from the me Corporation in 2019: Fixed Assets - $65,000,000 Long-term Investment - 0.10 FA FA=0.58 TA Intangible Assets = 0.05 FA Financial Leverage = 60% Long-term Liabilities = 65% TL ROTA in 2019 -17% The financial plan for the year 2020 is built around the following: Change in FA -20% - Change in NWC = 14% - Profit Retention Rate 48% - ROTA in 2020 = 120 percent of ROTA in 2019 - New stock issued should not exceed 12% of 2019 equity. - Depreciation rate of FA = 16% Required: a. Based on the EFM, provide a recap on the company profile in relation to change of financial scene and the possible effects on capitalization, liabilities and equity. b. What would be the case if the Corporation increases change in FA by 40% and NSI by 24%; other things remain the same. c. What would be the effect on Retained Earning portion if the DPR reduced by 17 percent. d. As an executive, what type of advice that you could give to the Top Management Team if the NWC is minus, no change in FA and profit retention is 100 percent as spelled out by the EFM model Step by Step Solution
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