Tab 27-4) Calculate the following using instructions on attachment:

Net Working Capital:

Permanent Working Capital:

Temporary Working Capital:

Tab 27-6) See attachment for scenario.

Tab 28-9) See attachment for scenario.

Problem 27-4 Quarterly working capital levels for your firm for the next year are included in the following table. What are the permanent working capital needs of your company? What are the tempor needs? Quarter (000) 1 2 3 Cash $100 $100 $100 Accounts receivable 200 100 100 Inventory 200 500 900 Accounts payable 100 100 100 Quarter (000) Net working capital Permanent working capital Temporary working capital 1 2 3 Requirements 1. In cell D14, by using cell references, calculate the net working capital for year 1 (1 p Copy cell D14, and paste it onto cells E14:G14 (1 pt.). 2. To calculate the permanent working capital, you need to find the minimum net workin capital by using the function MIN. In cell D15, by using the function MIN and cell references, calculate the permanent working capital (1 pt.). 3. In cell D16, by using relative and absolute cell references, calculate the temporary working capital needs for year 1 (1 pt.). Copy cell D16, and paste it onto cells E16:G (1 pt.). included in the following any? What are the temporary 4 $100 600 50 100 4 ng capital for year 1 (1 pt.). the minimum net working function MIN and cell lculate the temporary paste it onto cells E16:G16 Problem 27-6 The Hand-to-Mouth Company needs a $10,000 loan for the next 30 days. It is trying to deci Alternative A: Forgo the discount on its trade credit agreement that offers terms of 2/ Alternative B: Borrow the money from Bank A, which has offered to lend the firm $1 (no-interest) compensating balance of 5% of the face value of the loan Hand-to-Mouth must borrow even more than the $10,000. Alternative C: Borrow the money from Bank B, which has offered to lend the firm $1 origination fee. Which alternative is the cheapest source of financing for Hand-to-Mouth? Principal Term of loan $10,000 30 Alternative A: Forego trade discount Credit Terms 2.00% Additional days Interest rate per period Annual rate Alternative B: Borrow from Bank A APR 12.00% Compensating balance 5.00% Fee $100.00 Total borrowed Interest paid Interest & fee paid Periodic rate Annual rate Alternative C: Borrow from Bank B APR 15.00% Compensating balance 0.00% Origination fee 1.00% Fee Total borrowed Interest paid Interest & fee paid Periodic rate Annual rate Cheapest loan cost This is: Requirements 1. In cell D16, by using cell references, calculate the additional days of credit 2. In cell D17, by using cell references, calculate the implicit interest rate charged for the addit 3. In cell D18, by using cell references, calculate the annual cost of payables 4. In cell D25, by using cell references, calculate the total amount to borrow 5. In cell D26, by using cell references, calculate the interest paid (1 pt.) 6. In cell D27, by using cell references, calculate the interest & fee paid 7. In cell D28, by using cell references, calculate the periodic rate by dividing the interest & fe 8. In cell D29, by using cell references, calculate the annual rate (1 pt.) 9. In cell D37, by using cell references, calculate the fee to be paid (1 pt.) 10. In cell D38, by using cell references, calculate the total amount to borrow 11. In cell D39, by using cell references, calculate the interest paid (1 pt.) 12. In cell D40, by using cell references, calculate the interest & fee paid 13. In cell D41, by using cell references, calculate the periodic rate (1 pt.) 14. In cell D42, by using cell references, calculate the annual rate (1 pt.) 15. You will find the cheapest loan cost by using the function MIN. In cell D44, by using the fu the cheapest loan cost (1 pt.). 16. In cell D45, identify the cheapest alternative by typing Alternative A he next 30 days. It is trying to decide which of three alternatives to use: it agreement that offers terms of 2/10, net 30. hich has offered to lend the firm $10,000 for 30 days at an APR of 12%. The bank will require a of 5% of the face value of the loan and will charge a $100 loan origination fee, which means more than the $10,000. hich has offered to lend the firm $10,000 for 30 days at an APR of 15%. The loan has a 1% loan Hand-to-Mouth? 10 net 30 onal days of credit (1 pt.). it interest rate charged for the additional days of credit (1 pt.). cost of payables (1 pt.). mount to borrow (1 pt.). t paid (1 pt.). t & fee paid (1 pt.). ic rate by dividing the interest & fee paid (1 pt.). rate (1 pt.). be paid (1 pt.). mount to borrow (1 pt.). t paid (1 pt.). t & fee paid (1 pt.). ic rate (1 pt.). rate (1 pt.). n MIN. In cell D44, by using the function MIN and cell references, find lternative A, Alternative B or Alternative C (1 pt.). Problem 28-9 Your company has earnings per share of $4. It has 1 million shares outstanding, each of whi price of $40. You are thinking of buying TargetCo, which has earnings per share of $2, 1 mi shares outstanding, and a price per share of $25. You will pay for TargetCo by issuing new s There are no expected synergies from the transaction. a. If you pay no premium to buy TargetCo, what will your earnings per share be after th b. If you pay a 20% premium to buy TargetCo, what will your earnings per share be afte merger? c. What explains the change in earnings per share in part (a)? Are your shareholders any worse off? d. What will your price-earnings ratio be after the merger (if you pay no premium)? How this compare to your P/E ratio before the merger? How does this compare to TargetCo merger P/E ratio? Your Company: Earnings per share Shares outstanding Price per share $4.00 1,000,000 $40.00 Target: Earnings per share Shares outstanding Price per share $2.00 1,000,000 $25.00 Total consolidated earnings a. If you pay no premium to buy TargetCo, what will your earnings per share be after th Value of target company Shares of acquirer issued Total shares outstanding New EPS b. If you pay a 20% premium to buy TargetCo, what will your earnings per share be afte merger? Premium 20% Purchase price Value of target company Shares of acquirer issued Total shares outstanding New EPS c. What explains the change in earnings per share in part (a)? Are your shareholders any worse off? Focusing on EPS alone cannot tell you whether they're better or worse off. d. What will your price-earnings ratio be after the merger (if you pay no premium)? How this compare to your P/E ratio before the merger? How does this compare to TargetCo merger P/E ratio? Acquirer's P/E ratio before Acquirer's P/E ratio after Target's P/E ratio before Requirements To calculate the acquirer's new EPS, you need to calculate the total consolidated earnings an 1. of shares outstanding after the merger. Use cell references in all of the following requirem In cell D20, calculate the total consolidated earnings by adding both companies' earnings. 2. In cell D24, calculate the total value of the target company. (1 point.) 3. In cell D25, calculate the shares that the acquirer needs to issue. (1 point.) 4. In cell D26, calculate the total number of shares outstanding after the merger. In cell D27, by using cell references, calculate the new EPS. by dividing the total consolidat 5. total number of shares outstanding after the merger. (1 point.) 6. In cell D33, calculate the new price per share of the target company if a premium is paid. 7. In cell D34, calculate the new total value of the target company. (1 point.) 8. In cell D35, calculate the shares that the acquirer needs to issue. (1 point.) 9. In cell D36, calculate the total number of shares outstanding after the merger. In cell D37, by using cell references, calculate the new EPS by dividing the total consolidate 10. total number of shares outstanding after the merger. (1 point.) 11. In cell D45, by using cell references, calculate the acquirer's P/E ratio before the merger. 12. In cell D46, calculate the acquirer's P/E ratio after the merger. (1 point.) 13. In cell D47, calculate the target company's P/E ratio before the merger. (1 point.) outstanding, each of which has a ngs per share of $2, 1 million argetCo by issuing new shares. ings per share be after the merger? earnings per share be after the Are your shareholders any better or ou pay no premium)? How does this compare to TargetCo's pre- ings per share be after the merger? earnings per share be after the Are your shareholders any better or etter or worse off. ou pay no premium)? How does this compare to TargetCo's pre- consolidated earnings and the total number the following requirements. h companies' earnings. (1 point.) he merger. (1 point.) iding the total consolidated earnings by the y if a premium is paid. (1 point.) he merger. (1 point.) ding the total consolidated earnings by the tio before the merger. (1 point.) ger. (1 point.)