Homework Answers
As per policy, only four parts of a question is allowed to answer at a time, so first four parts Q9-12 are solved here:
| 9) | ||||||||||
| LTD = Total Assets - current liabilities - total equity | ||||||||||
| LTD = (cash+MS+Inv.+P&M) - (AE+AP) - total equity | ||||||||||
| LTD = (20000+30000+15000+100000) - (5000+12000) - 120000 = RM 28000 | ||||||||||
| 10) | ||||||||||
| Discretionary Financing Needs = Total Assets - Projected financing = 130000-113000 = RM17000 | ||||||||||
| Source should borrow as it requires a temporary financing which would be | ||||||||||
| paid off after the project or period. The financing through bank could prove to be costly as it | ||||||||||
| contains many other charges other than interest. | ||||||||||
| 11) Assuming that alongwith the sales the EBT would also have a growth of | ||||||||||
| 12%, then Sales for 2019 will be 112m and EBT will be 12*1.12= 13.44m. | ||||||||||
| 2019's NP would be 13.44*(1-0.35) = 8.736m | ||||||||||
| 2018's NP is 12*(1-0.35) = 7.8m | ||||||||||
| The difference of NP would be 8.736m - 7.8m = RM 0.9936m | ||||||||||
| 12) The fixed assets do not change with the sales growth and remain constant. | ||||||||||
| So, growth has effect on current assets or working capital. | ||||||||||
| Thus, the total assets in 2019 would be Current assets with change + FA= [ (2+5+4)m * 110%] + 10m = $22.10 | ||||||||||
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