Question: Problem: 10 Start with the partial model in the file Ch12 P10 Build a Model_x/sx on the textbook's Web site, which financial statements of Zieber

Problem: 10 Start with the partial model in the
Problem: 10 Start with the partial model in the file Ch12 P10 Build a Model_x/sx on the textbook's Web site, which financial statements of Zieber Corporation. Forecast Zeiber's 2020 income statement and balance sh following assumptions: (1) Sales grow by 6%. (2) The ratios of expenses to sales, depreciation to fix sales, accounts receivable to sales, and inventories to sales will be the same in 2020 as in 2019. (3) any new stock or new long-term bonds. (4) The interest rate is 11% for long-term debt and the intere term debt is based on the average balance during the year. (5) No interest is earned on cash. (6) Reg at an 8% rate. (7) The tax rate is 25%. Calculate the additional funds needed (AFN). If new financing i will be raised by drawing on a line of credit with an interest rate of 12%. Assume that any draw on th be made on the last day of the year, so there will be no additional interest expense for the new line o funds are available, pay a special dividend. Key Input Data: Used in the forecast Tax rate 259% Dividend growth rate 8% Rate on notes payable-term debt, 99% Rate on long-term debt, r 11% Rate on line of credit, r Sales $455,150 Growth

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

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

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!