7. Roslyn Inc. is a small, publicly traded company that had revenues of $250 million in...

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7. Roslyn Inc. is a small, publicly traded company that had revenues of $250 million in the most recent year, while breaking even (a profit of zero). Currently, the company has total working capital of $35 million, which includes a cash balance of $25 million. The table below provides estimates of revenues and net profit margins for the company, for the next five years. Year 1 2 3 5 Revenue (in millions) $750.00 $1,000.00 $1,200.00 $1,350.00 $1,500.00 Net Profit Margin 2% 3% 4% 5% 6% 4 The company plans to keep its non-cash working capital, as a percent of revenues, constant for the next five years and has no significant capital expenditures or depreciation over that period. If the company plans to return no cash in years 1 and 2, and pay out 40% of net income as dividends in years 3-5, estimate how much of a cash balance it will have at the end of year 5. (4 points) 7. Roslyn Inc. is a small, publicly traded company that had revenues of $250 million in the most recent year, while breaking even (a profit of zero). Currently, the company has total working capital of $35 million, which includes a cash balance of $25 million. The table below provides estimates of revenues and net profit margins for the company, for the next five years. Year 1 2 3 5 Revenue (in millions) $750.00 $1,000.00 $1,200.00 $1,350.00 $1,500.00 Net Profit Margin 2% 3% 4% 5% 6% 4 The company plans to keep its non-cash working capital, as a percent of revenues, constant for the next five years and has no significant capital expenditures or depreciation over that period. If the company plans to return no cash in years 1 and 2, and pay out 40% of net income as dividends in years 3-5, estimate how much of a cash balance it will have at the end of year 5. (4 points)

Answer rating: 100% (QA)

Introduction Roslyn Inc is a small publicly traded company that is currently breaking even with a to... View the full answer