question 25

0,000 and after tax cash inflows of$65,000 and peltively. This project is an extension of the irm's current operations and IS equally as risky as the current firm. The firm uses only debt and common stock to finance its operations and maintains a debt-equity ratio of 0.50. The after tax cost of debt is 3.8% and the cost of equity eWhat is the projected net present value of this project? 0 0 Short-term Financial Planning 1 25. London, Inc. begins th quarter with arf accounts eceivable balance of $325,000 and an accounts payable lo balance of $210,000. The company has an average of 30 days sales in recgivables and it pays its suppliers on 45 days. Expected sales for the quarter ahead are $1,176 andra ate Res revenue. London's use of lean manufacturing is such that it secures raw materials on a just-in-time basis Beyond raw materials, expected other expenses are $425,000 per quarter which are paid in th which they are incurred. What is the quarterly cash flow? ts equals 40% of sales 26. London, Inc. has a cash balance of $235,000. The company's projected operating cash flows for the next four quarters are $215,000;-$462,000; -$25,000; and $362,000 respectively. Does the company need to raise any additional capital if it wants to hold a minimum cash balance of $150 ,900? If so, how much must it raise and in what quarter if it only wants to raise outside capital once over the year? 235 SOOU