Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Zapatera Enterprises is evaluating its financing requirements for the coming year. The firm has been in business for only 1 year, but the CFO predicts

Zapatera Enterprises is evaluating its financing requirements for the coming year. The firm has been in business for only 1 year, but the CFO predicts the firm's operating expenses, current assets, net fixed assets, and current liabilities will remain at their current proportion of sales. Last year Zapatera had $12.28 million in sales and net income of $1.22 million. The firm anticipates that next year's sales will reach $15.52 million, with net incomerising to $2.08 million. Given its present high rate of growth, the firm retains all its earnings to help defray the cost of new investments. The firm's balance sheet for is found below:

Zapatera Enterprises, Inc.
Balance Sheet 12/31/10 % of Sales

Current assets $2,600,000 21.173%

net fixed assets $6,500,000 52.932%

Total 9,100,000

Liabilities and Owners Equity

Accounts payable 3,300,000 26.873%

long-term debt 2,500,000

Total liabilites 5,800,000

Common stock $1,300,000

paid-in capital 2,200,000

Retained earnings -200,000

common equity 3,300,000

Total 9,100,000

Estimate Zapatera's financing requirements(that is, total assets) for 2014 and its discretionary financing needs(DFN) for 2014. Use the percentatge of sales given in Zapatera Enterprises balance sheet for 2013. Make sure to round all intermediate calculations to at lease five decimal places.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Applied Conic Finance

Authors: Dilip Madan, Wim Schoutens

1st Edition

1107151694, 978-1107151697

More Books

Students also viewed these Finance questions

Question

Explain the factors influencing wage and salary administration.

Answered: 1 week ago

Question

Examine various types of executive compensation plans.

Answered: 1 week ago

Question

1. What is the meaning and definition of banks ?

Answered: 1 week ago