(Financial forecasting-percent of sales) Next year's sales for Cumberland Mfg. are expected to be $20.00 million. Current sales are $16 million, based on current assets of $5.33 million and fixed assets of $8.00 million. The firm's net profit margin is 3 percent after taxes. Cumberland estimates that its current assets will rise in direct proportion to the increase in sales, but that its fixed assets will increase by only $200,000. Currently, Cumberland has $1.50 million in accounts payable (which vary directly with sales), $2 million in long-term debt (due in 10 years), and common equity (including $2 million in retained earnings) totaling $9.83 million. Cumberland plans to pay $0.20 million in common stock dividends next year. a. What are Cumberland's total financing needs (that is, total assets) for the coming year?
b. Given the firm's projections and dividend payment plans, what are its discretionary financing needs?
c. Based on your projections, and assuming that the $200,000 expansion in fixed assets will occur, what is the largest increase in sales the firm can support without having to resort to the use of discretionary sources of financing?

What is the difference between secure bonds and naked bonds?

Which of the following is an example of search costs? a.) driving to a faraway place to find available goods b.) buying goods in some special way that is outside the normal channels c.) paying a premium cost for goods d.) selling extra goods for a discount price

Cardinal company is considering a project that would require a $2,725,000 investment in equipment with a useful life of five years. at the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. the company’s discount rate is 14%. the project would provide net operating income each year as follows: sales $2,867,000 variable expenses 1,125,000 contribution margin 1,742,000 fixed expenses: advertising, salaries, and other fixed out-of-pocket costs $706,000 depreciation 465,000 total fixed expenses 1,171,000 net operating income $571,000 1. which item(s) in the income statement shown above will not affect cash flows? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.) (a)sales (b)variable expenses (c) advertising, salaries, and other fixed out-of-pocket costs expenses (d) depreciation expense 2. what are the project’s annual net cash inflows? 3.what is the present value of the project’s annual net cash inflows? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 4.what is the present value of the equipment’s salvage value at the end of five years? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 5.what is the project’s net present value? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.)