AFN Analysis needed for the following scenario: Breville Co, Inc. AFN Calculation Balance Sheet A*
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AFN Analysis needed for the following scenario:
Breville Co, Inc. | AFN Calculation | |||||
Balance Sheet | A* | |||||
Assets: | Liabilities: | L* | ||||
Current Assets | $ 995,000 | Accounts Payable | $ 300,000 | S0 | ||
Fixed Assets | $ 3,000,000 | Notes Payable | $ 700,000 | S1 | ||
Other Current Liabilities | $ 195,000 | ΔS | ||||
Bonds Payable | $ 1,200,000 | M | ||||
Total Liabilities: | $ 2,395,000 | RR | ||||
Equity | $ 1,600,000 | AFN | ||||
Total Assets: | $ 3,995,000 | Total Liabilities & Equity: | $ 3,995,000 | |||
Funds distributed in $50,000 increments (added to long-term debt)
IF AFN > $200,000, then the pre-tax cost of debt is 15%
Otherwise, the pre-tax cost of debt is 18%
Any detailed explanation would be appreciated.
Related Book For
Financial Management Theory & Practice
ISBN: 9780324652178
12th Edition
Authors: Eugene BrighamMichael Ehrhardt
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