Liberty University BUSI 320 connect homework 3 correct answers 100% guaranteed with explanations

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Liberty University BUSI 320 connect homework 3 correct answers 100%guaranteedwith explanationsSharpe Knife Company expects sales next year to be $1,720,000 if the economy is strong, $910,000 if the economy is steady, and$720,000 if the economy is weak. Mr. Sharpe believes there is a 10 percent probability the economy will be strong, a 45 percent probabilityof a steady economy, and a 45 percent probability of a weak economy.What is the expected level of sales for the next year?Antivirus Inc. expects its sales next year to be $2,200,000. Inventory and accounts receivable will increase by$450,000 to accommodatethis sales level. The company has a steady profit margin of 9 percent with a 20 percent dividend payout.Bambino Sporting Goods makes baseball gloves that are very popular in the spring and early summer season. Units sold areanticipated as follows:What is the ending inventory at the end of each month? Compare the unit sales to the units produced and keep a running totalIf the inventory costs $12 per unit and will be financed at the bank at a cost of 12 percent, what is the monthly financing cost and thetotal for the four months?Biochemical Corp. requires $580,000 in financing over the next three years. The firm can borrow the funds for three years at12.90percent interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay9.75 percent interest in the first year, 14.50 percent interest in the second year, and 10.90 percent interest in the third year. Assumeinterest is paid in full at the end of each yearDetermine the total interest cost under each planWhich plan is less costlySauer Food Company has decided to buy a new computer system with an expected life of three years. The cost is $440,000. Thecompany can borrow $440,000 for three years at 14 percent annual interest or for one year at 12 percent annual interest. Assumeinterest is paid in full at the end of each year.How much would Sauer Food Company save in interest over the three-year life of the computer system if the one-year loan is utilizedand the loan is rolled over (reborrowed) each year at the same 12 percent rate? Compare this to the 14 percent three-year loanWhat if interest rates on the 12 percent loan go up to 18 percent in year 2 and 21 percent in year 3? What would be the totalinterestcost compared to the 14 percent, three-year loan?Assume that Hogan Surgical Instruments Co. has $4,100,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn areturn of 14 percent, but with a high-liquidity plan, the return will be 10 percent. If the firm goes with a short-term financing plan, thefinancing costs on the $4,100,000 will be 6 percent, and with a long-term financing plan, the financing costs on the $4,100,000 will be 8percentCompute the anticipated return after financing costs with the most aggressive asset-financing mixCompute the anticipated return after financing costs with the most conservative asset-financing mixCompute the anticipated return after financing costs with the two moderate approaches to the asset-financing mix.Assume that Atlas Sporting Goods Inc. has $1,010,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of18 percent, but with a high-liquidity plan the return will be 15 percent. If the firm goes with a short-term financing plan, the financingcosts on the $1,010,000 will be 12 percent, and with a long-term financing plan, the financing costs on the $1,010,000 will be 14 percentCompute the anticipated return after financing costs with the most aggressive asset-financing mixCompute the anticipated return after financing costs with the most conservative asset-financing mixCompute the anticipated return after financing costs with the two moderate approaches to the asset-financing mix.If the firm used the most aggressive asset-financing mix described in partaand had the anticipated return you computed for parta,what would earnings per share be if the tax rate on the anticipated return was 30 percent and there were 20,000 shares outstandingShort-term rates are 12 percent. Long-term rates are 17 percent. Earnings before interest and taxes are $1,200,000. The tax rate is 40percentAssume the term structure of interest rates becomes inverted, with short-term rates going to 14 percent and long-term rates 4percentage points lower than short-term rates. Earnings before interest and taxes are $1,190,000. The tax rate is 30 percentIf long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, whatwill earnings after taxes be?Guardian Inc. is trying to develop an asset-financing plan. The firm has $440,000 in temporary current assets and $340,000 inpermanent current assets. Guardian also has $540,000 in fixed assets. Assume a tax rate of 30 percentConstruct two alternative financing plans for Guardian. One of the plans should be conservative, with 60 percent of assets financed bylong-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The currentinterest rate is 11 percent on long-term funds and 6 percent on short-term financing. Compute the annual interest payments under eachplanGiven that Guardian’s earnings before interest and taxes are $320,000, calculateearnings after taxes for each of your alternatives.What would the annual interest and earnings after taxes for the conservative and aggressive strategies be if the short-term and long-term interest rates were reversed?Lear Inc. has $900,000 in current assets, $400,000 of which are considered permanent current assets. In addition, the firm has$700,000 invested in fixed assetsLear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 8 percent. The balancewill be financed with short-term financing, which currently costs 5 percent. Lear’s earnings before interest and taxes are $300,000.Determine Lear’s earnings after taxes under this financing plan. The tax rate is 30 percentAs analternative, Lear might wish to finance allfixed assets and permanent current assets plus half of its temporary current assets withlong-term financing and the balance with short-term financing. The same interest rates apply as in parta. Earnings before interest andtaxes will be $300,000. What will be Lear’s earnings after taxes? The tax rate is 30 percentUsing the expectations hypothesis theory for the term structure of interest rates, determine the expected return for securities withmaturities of two, three, and four years based on the following dataCarmen’s Beauty Salon has estimated monthly financing requirements for the next six months as followsCompute total dollar interest payments for the six monthsCompute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six monthsIf long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar interest payments be larger orsmaller than with the short-term financing plan?Carmen’s Beauty Salon has estimated monthly financing requirements for the next six months as follows:What long-term interest rate would represent a break-even point between using short-term financing and long-term financingBombs Away Video Games Corporation has forecasted the following monthly salesConstruct a monthly production and inventory schedule in units. Beginning inventory in January is 41,000 units.Prepare a monthly schedule of cash receipts. Sales in December before the planning year are $100,000Prepare a cash payments schedule for January through December. The production costs of $2 per unit are paid for in the monthinwhich they occur. Other cash payments, besides those for production costs, are $61,000 per month

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