read and answer as required

CASE ANALYSIS - INSPIRON INC. The following comprehensive assessment is based on a continuing case study of Inspiron Inc. The following financial statements have been provided: PART A 15 Marks Utilize the 2022 financial statements for Inspiron Inc. provided on page 2 and assume that the company is currently operating below capacity. Required: Prepare Pro-Forma statements for the year ending June 30, 2023 (rounding all figures to the nearest dollar) assuming: All costs/income/expenses and net working capital vary directly with sales/revenue. No new equity is raised. Sales are projected to increase by 20%. The tax rate will remain constant. The dividend payout ratio will decrease to 30%. Depreciation Expense will remain unchanged. Clearly state if Inspiron Inc. will require external financing or if the company would have excess financing in 2023, and how much. (15 Marks) PART B 10 Marks Based on the results of the pro-forma statement in part A above, Inspiron Inc. is considering reducing its financing by retiring some of its long-term debt (bonds). While the company's bonds recently traded on the secondary market at a selling price of 120% of par, the Finance Manager is trying to ascertain if this was a reasonable price given current market conditions and the company's credit ratings. Details of the company's bond are provided below: Required: Given a current yield to maturity of 7.5%, based on similar bonds in the market, what price would an investor be willing to accept from Inspiron Inc. for $1,000 face value of this bond? (10 Marks) In addition to the projects evaluated above, Inspiron Inc. is considering several other savings and financing options in an effort to expand operations and improve overall efficiency of operations, while fully investing idle cash. PART A 6 Marks Based on Statement of Financial Position as at June 30, 2022, the company had $244,316,000 in Cash \& Equivalents. Of this, $40,000,000 is in a fixed deposit that is due to mature on January 2,2023 . The company is considering the following investment options for these funds: Investment A Annual Interest Rate of 6.5%, compounded semi-annually Investment B Annual Interest Rate of 6.25%, compounded monthly Investment C Annual Interest Rate of 6.55%, compounded annually Required: Advise the company on the best investment option for the maturing funds. (6 Marks) PART B 9 Marks The company is considering purchasing a new delivery truck for $2,500,000. The intention is to obtain a 4-year loan from their bank, at an interest rate of 9% per annum. Annual payments are expected to be made on the loan. Required: (a) Calculate Inspiron Inc.'s annual payment on this loan. (5 Marks) (b) Prepare the 4-year Amortization Schedule for this loan. (4 Marks) PART C 10 Marks As part of being a responsible corporate citizen, Inspiron Inc. wants to establish a college fund to assist under-privileged students in pursuing their 4-year under-graduate degree programmes. The tuition fee is estimated to be $75,000 for the first year but is expected to grow/increase by 4% per year thereafter. Required: (a) Assuming this college fund will earn 8% interest per annum, calculate the amount required at the start of a student's college journey to fund his/her full tuition. (5 Marks) (b) If Inspiron would like to sponsor the first student in two years' time and they currently have $215,000 earmarked for investment, what annual rate of interest is required to accumulate the amount needed as calculated in part (a)