Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The balance sheet of a borrower shows: Cash 200,000 Accounts Payable 2,100,000 Inventory 1,110,000 Other 90,000 Current Assets 3,500,000 PPE, Net 2,500,000 Note Receivable-Owner 50,000
The balance sheet of a borrower shows: Cash 200,000 Accounts Payable 2,100,000 Inventory 1,110,000 Other 90,000 Current Assets 3,500,000 PPE, Net 2,500,000 Note Receivable-Owner 50,000 Intangible Assets 6,000 Total 6,056,000 Accounts Payable 950,000 CPLTD 200.000 Line of Credit 1,000,000 Misc. Payables 108,000 Current Liabilities 2,258,000 Note Payable-Bank 1,400,000 Other LT Liabilities (non-i) 340,000 Common Stock 1,000,000 Retained Earnings 1,058,000 Total 6,056,000 The company has requested $3,000,000 to fund an acquisition. Using the traditional leverage approach and giving the company an additional $500,000 in Line availability, how much of the acquisition amount can you fund with senior bank debt? (Show your answer to the nearest dollar. For example, $1,234,567.89 should be entered as $1,234,568.) The balance sheet of a borrower shows: Cash 200,000 Accounts Payable 2,100,000 Inventory 1,110,000 Other 90,000 Current Assets 3,500,000 PPE, Net 2,500,000 Note Receivable-Owner 50,000 Intangible Assets 6,000 Total 6,056,000 Accounts Payable 950,000 CPLTD 200.000 Line of Credit 1,000,000 Misc. Payables 108,000 Current Liabilities 2,258,000 Note Payable-Bank 1,400,000 Other LT Liabilities (non-i) 340,000 Common Stock 1,000,000 Retained Earnings 1,058,000 Total 6,056,000 The company has requested $3,000,000 to fund an acquisition. Using the traditional leverage approach and giving the company an additional $500,000 in Line availability, how much of the acquisition amount can you fund with senior bank debt? (Show your answer to the nearest dollar. For example, $1,234,567.89 should be entered as $1,234,568.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started