Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

the questions that need to solve it Question A1. Put together a projected Income statement and Balance sheet for USB Music Cards to Roll for

image text in transcribedimage text in transcribedthe questions that need to solve it

Question A1. Put together a projected Income statement and Balance sheet for "USB Music Cards to Roll" for 2023, 2024 and 2025 (remember the numbers are projected to be the same for Video to Roll for 1980, 1981 and 1982 and use the categories listed above: taxes paid, taxable income, interest paid, current assets, fixed assets, current liabilities, long term debt, depreciation, costs of goods sold, gross sales, net income, dividends and additions to retained earnings, earnings before interest and taxes and owner equity and liability). PRINT NEATLY. ONLY USE FACTS WHICH ARE SUPPLIED ABOVE AND NOT FACTS FROM SUBSEQUENT QUESTIONS. Question A2. What formulas can you employ to determine how much debt "Video to Roll" used in 1980, how well its interest obligations were covered, and how well it can use cash to pay interest obligations. Be specific as to what each ratio will tell you. Question A3. Calculate each formula for 1980, 1981, 1982. (Show your work) Question A4. Assume the annual rate of inflation is 3%. Using the net income figure from 1980 from "Video to Roll", you calculated in question A1, how much would you need to earn in 2022 from the business to have the same net income as the owners did from 1980 from operating "Video to Roll". (Show your work). Question A5. You are trying to figure out what a smart investor should have paid for Video to Roll in 1980. You know that smart investors were looking for an investment for three years at a 15% rate of return which would have paid them $8,000 per year. [Assume 1980 was a typical year for "Video to Roll" for net income (cash flows).] What type of investment does this most look like? What was this three-year investment worth it for those investors? (Show your work). The common-sized balance sheets for "Video to Roll" were not damaged. It showed the following

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started