Question: Start with the partial model in the file Ch12 P10 Build a Model.xlsx on the text book's Web site, which contains the 2016 financial statements

Start with the partial model in the file Ch12 P10 Build a Model.xlsx on the text book's Web site, which contains the 2016 financial statements of Zieber Corporation. Forecast Zieber's 2017 income statement and balance sheets. Use the following assumptions:

(1) Sales grow by 6%.

(2) The ratios of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, and inventories to sales will be the same in 2017 as in 2016.

(3) Zieber will not issue any new stock or new long-term bonds.

(4) The interest rate is 11% for long term debt and the interest expense on long-term debt is based on the average balance during the year.

(5) No interest is earned on cash.

(6) Regular dividends grow at an 8% rate Calculate the additional funds needed (AFN). If new financing is required, assume it will be raised by drawing on a line of credit with an interest rate of 12%. Assume that any draw on the line of credit will be made on the last day of the year, so there will be no additional interest expense for the new line of credit. If surplus funds are available, pay a special dividend.

a. What are the forecasted levels of the line of credit and special dividends?

b. Now assume that the growth in sales is only 3%. What are the forecasted levels of the line of credit and special dividends?

Step by Step Solution

★★★★★

3.36 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The 2016 financial statements of Zieber Corporation Forecast Zeibers 2017 income statement and balance sheets Use the following assumptions 1 Sales grow by 6 2 The ratios of expenses to sales deprecia... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1093-B-F-F-M(8203).xlsx

300 KBs Excel File

Students Have Also Explored These Related Finance Questions!

a) b) c) d) Question 1 Explain the concept of "Time Value of Money". Why this is important for engineering economy studies Explain the differences between the following, and show how they are related...

Start with the partial model in the file Ch3 P07 Build a Model.xls from the textbook's Web site. Following is information for the required returns and standard deviations of returns for A, B, and C:...

Start with the partial model in the file attached. Marvel Pence, CEO of Marvels Renovations, a custom building and repair company, is preparing documentation for a line of credit request from his...

B 10 Start with the partial model in the file Ch12 P10 Build a Model.xlsx on the textbook's Web site, which contains the 2016 financial statements of Zieber Corporation. Forecast Zeiber's 2017 income...

I am lost. Start with the partial model in the file Ch12 P10 Build a Model.xlsx on the textbook's Web site, which contains the 2019 financial statements of Zieber Corporation. Forecast Zeiber's 2020...

3 Merge & Center B1 fx B C D E G H 4 5 Start with the partial model in the file Ch12 P10 Build a Model.xlsx on the textbook's Web site, which contains the 2019 financial statements of Zieber...

Please pretty please i need the fuctions to get the solution just not the solutions please Nit letting me load excel file Start with the partial model in the file Ch09 P10 Build a Model.xlsx on the...

Start with the partial model in the file Ch09 P10 Build a Model.xlsx on the textbooks Web site, which contains the 2021 financial statements of Zieber Corporation. Forecast Ziebers 2022 income...

Start with the partial model in the file Ch09 P10 Build a Model.xlsx on the textbook's Web site, which contains the 2015 financial statements of Zieber Corporation. Forecast Zeiber's 2016 income...

Chapter: 12 Problem: 10 Start with the partial model in the file Ch12 P10 Build a Model.xls on the textbooks Web site, which contains the 2013 financial statements of Zieber Corporation. Forecast...

What is the purpose of the International Criminal Court (ICC)?

Sunland Company sells indoor high-resolution security cameras with a unit selling price of $100, a unit contribution margin of $75, and a contribution margin ratio of 75%. The company projects total...

Alex and Blaine each own half of the general partnership. With the addition of Corey as a third general partner, each individual partner will have a one-third ownership interest. How would the...

Would it be more helpful in your organization to use a range rather than a fixed estimate? Why or why not?

The following linear correlation, sometimes referred to as Bartletts relationship, has been found between lattice enthalpy (kJ mol 1 ) and the inverse cube root of the formula unit volume V (in nm 3...

3. Construct a simple Du Pont analysis for Ford and its peers. What are Fords strengths and weaknesses relative to its competitors?

Do you consider Fords inventory management to be a strength or a weakness?

In a random sample of 50 middle school students' backpacks, the average weight was 15.6 pounds with a standard deviation of 3.2 pounds. Construct and interpret a 96% confidence interval for the mean...

Assume u have a portfolio of 10,000,000 in treasury Bonds and u buy a CDS with principal of 20,000,000 and spread duration of 2.5. by How much by the spread will have to move so that ur new portfolio...

Problem-2 Write a script to prompt the user for a number and compute the square root of the provided number. If the number is negative, display a sentence stating that the square root of a negative...