QUESTION 1 1.1 REQUIRED Use the percentage-of-sales method to determine the increase in the net working capital (20 Marks) requirements of Britar Engineering for 2020. (6 marks) INFORMATION The following information was extracted from the financial statements of Britar Engineering for 2019. R 1 728 000 Sales Debtors Short-term loans 432 000 311 040 518 400 Inventory 86 400 Cash and cash equivalents Creditors 259 200 Britar Engineering anticipates sales of R2 160 000 for 2020. 1.2 Study the graph below and identify the type of working capital financing policy used by the business. Comment on this policy. (5 marks) R Fluctuating current assets Short-term financing Permanent current assets Long-term financing Non-current assets Time Questions #1,3,10,13,17 business finance book:practical financial management:Lasher chapter 13 WACC Calculations: Concept Connection Example 13-1 (page 552) 1. Blazingame Inc.'s capital components have the following market values: Debt Preferred stock Common equity $35,180,000 17,500,000 48,350,000 Calculate the firm's capital structure and show the weights that would be used for a weighte cost of capital (WACC) computation. 3. Willerton Industries Inc. has the following balances in its capital accounts as of 12/31/X3 Long-term debt Preferred stock $65,000,000 15.000.000 Common stock Paid i 40,000,000 15,000,000 Retired rings 31,500,000 Calculate Willerton's capital structure based as book valars Cost of Debt: Concept Connection Example 13-3 (page 557) 10. Asbury Corp. issued 30-year bonds 11 years ago with a coupon rate of 9.5%. Those bonds are now sell- ing to yield 7%. The firm also issued some 20-year bonds 2 years ago with an 8% coupon rate. The two bond issues are rated equally by Standard and Poors and Moody's. Asbury's marginal tax rate is 38% a. What is Asbury's after-tax cost of debt? b. What is the current selling price of the 20-year bonds? Cost of Preferred Stock: Concept Connection Example 13-4 (page 558) 13. Harris Inc.'s preferred stock was issued five years ago to yield 9%. Investors buying those shares on the secondary market today are getting a 14% return. Harris generally pays flotation costs of 12% on new securities issues. What is Harris's cost of preferred financing? b. from new stock? Cost of Retained Earnings-Constant Growth (Gordon) Model: Concept Connection Example 13-6 (page 561) 17. Klints Inc. paid an annual dividend of $1.45 last year. The firm's stock sells for $29.50 per share, and the company is expected to grow at about 4% per year into the foreseeable future. Estimate Klints' cost of retained earnings. Roland Corporation presented the following information which was extracted from its financial statements for the years 2016 and 2015: Net income $48000 Depreciation $18000 issuance of bonds payable $44000 payment of dividend $18000 purchase of equipment $140000 sale equipment $74000 increase in inventory $8000 issuance of common stock $19000 loss on sale of equipment $10000 Purchase of Treasury stock $5000 Increase in accounts payable Increase in accounts receivable $5000 $3000 $5000 Decrease in accrued liability Instructions: 1.Prepare a Statement showing the computation of the company's net cash flow provided by operating activities for the year ended December 31,2016. 2.Prepare a statement showing the computation of the company's net cash flow provided by financing activities for the year ended December 31,2016.