Question 1

The market size for Loppins is 40 million units.If SPI Inc.has a market share of 40% and the average sales price is $3 per Loppin,what is the dollar amount of sales of SPI?

Accepted Answer

SPI Inc. has a market share of 40% of 40 million units, which is 16 million units. At $3 per Loppin, the sales amount is 16 million units * $3 = $48 million.

Question 2

Use the table for the question(s)below. 
-The amount of net working capital for Ideko in 2015 is closest to:

Accepted Answer

Net working capital = Current assets - Current liabilities = 57,945 - 35,195 = 22,750

Question 3

Kendo Corp.is projecting sales of $15 million in the coming year.If the size of the market is $50 million,and Kendo's projected market share is 25%,what is the average sale price of its products?

Accepted Answer

If Kendo Corp.'s projected market share is 25%, that means they are projecting to capture 25% of the $50 million market, which is $12.5 million ($50 million x 0.25 = $12.5 million).

To find the average sale price of Kendo's products, we can divide their projected sales ($15 million) by their projected market share ($12.5 million): 
$15 million / $12.5 million = 1.2

Therefore, the average sale price of Kendo's products is $1.20.

The other answer choices do not yield the correct calculation.

Question 4

The maximum growth rate that a firm can achieve without issuing new equity or by increasing its debt-to-equity ratio is the firm's sustainable growth rate.

Accepted Answer

The statement is true. The sustainable growth rate is the maximum rate at which a company can grow without increasing its debt-to-equity ratio or issuing new equity. It can be calculated using the company's profit margin, asset turnover, and dividend payout ratio.

Question 5

What is minimum required cash?

Accepted Answer

The answer of What is minimum required cash?...

Question 6

Use the table for the question(s)below.
Ideko Sales and Operating Cost Assumptions
 
-Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2016?

Accepted Answer

The answer of Use the table for the question(s)below.
Ideko Sales...

Question 7

The market size for Loppins is 60 million units.If SPI Inc.has a market share of 20% and the average sales price is $3 per Loppin,what is the dollar amount of sales of SPI?

Accepted Answer

SPI Inc.'s sales in units would be 20% of 60 million, which is 12 million units. At $3 per Loppin, the dollar amount of sales would be 12 million units * $3/unit = $36 million.

Question 8

Use the table for the question(s)below. 
-The amount of the increase in net working capital for Ideko in 2016 is closest to:

Accepted Answer

To calculate the change in net working capital, we need to subtract the net working capital for 2015 from 2016. Therefore, $32,740 - $29,075 = $3,665. The closest option is C.

Question 9

Use the table for the question(s)below. 
-The amount of net working capital for Ideko in 2016 is closest to:

Accepted Answer

The answer of Use the table for the question(s)below. 
-The...

Question 10

Use the table for the question(s)below. 
-The amount of net working capital for Ideko in 2017 is closest to:

Accepted Answer

The answer of Use the table for the question(s)below. 
-The...

Question 11

The percent of sales method relies on the fact that capacity increases are ________,even though in practice such increases are ________.

Accepted Answer

The percent of sales method assumes that capacity increases can be made in small increments in response to changes in sales volume, which is incremental. However, in practice, capacity increases often involve larger, more substantial changes, which are lumpy. Therefore, choice A is the best option as it accurately reflects the mismatch between the theoretical assumptions of the method and practical limitations.

Question 12

Use the table for the question(s)below.
Ideko Sales and Operating Cost Assumptions
 
-Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2018?

Accepted Answer

Based on the table, Ideko expects to sell 1800 units in 2018. To produce this amount, they need a production capacity of 1887 units. However, they also expect to have 10% of their production capacity in safety stock, which would come out to be 188.7 units. When we add the safety stock to the needed production capacity, we get 1887+188= 2075 units. However, the company already has 373 units in inventory, so they only need to produce 1702 units (2075-373) in 2018.

Question 13

Kendo Corp.is projecting sales of $14 million in the coming year.If the size of the market is $120 million,and Kendo sells its products for an average sale price of $36.25,what is Kendo's projected market share?

Accepted Answer

Kendo's projected market share is calculated by dividing its projected sales by the total market size, then multiplying by 100 to get a percentage. ($14 million / $120 million) * 100 = 11.67%, which rounds to 12%. However, none of the options match exactly, but 5% is the closest reasonable choice given the options.

Question 14

With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2016 is closest to:

Accepted Answer

To calculate the forecasted accounts receivable, we need to use the following formula:
Accounts Receivable Days = (Accounts Receivable / Average Daily Sales)

We know that the target accounts receivable days is 60, and we can assume that the average daily sales will stay the same as last year (since the question does not mention any changes to sales).

Let's rearrange the formula to solve for Accounts Receivable:

Accounts Receivable = Accounts Receivable Days x Average Daily Sales

Accounts Receivable = 60 days x $283.60 = $17,016

However, the question is asking for the closest answer, which is B) $16,970.

Question 15

With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2016 is closest to:
A)$14,525
B)$19,690
C)$22,710
D)$16,970
E)$24,560

Accepted Answer

The answer of With the proper changes it is believed...

Question 16

What is the major shortcoming of the percent of sales method for firms experiencing rapid growth?

Accepted Answer

The answer of What is the major shortcoming of the...

Question 17

What are a firm's options when it generates more cash than planned?

Accepted Answer

The answer of What are a firm's options when it...

Question 18

Use the table for the question(s)below. 
-The amount of the increase in net working capital for Ideko in 2017 is closest to:

Accepted Answer

To calculate the increase in net working capital, we need to take the difference between the total current assets and the total current liabilities for each year. The increase in net working capital for Ideko in 2017 can be calculated as:
($99,420 - $95,330) = $4,090
Therefore, the closest option is C) $4090.

Question 19

The market size for Loppins is 80 million units.If SPI Inc.has a market share of 30% and the average sales price is $2 per Loppin,what is the dollar amount of sales of SPI?

Accepted Answer

SPI Inc.'s sales in units would be 30% of 80 million, which is 24 million units. At $2 per Loppin, the dollar amount of sales would be 24 million units * $2 = $48 million.

Question 20

Use the table for the question(s)below.
Ideko Sales and Operating Cost Assumptions
 
-Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2017?

Accepted Answer

According to the table, Ideko's sales projection for 2017 is 1650 units. To this, we add their desired ending inventory of 370 units and subtract their beginning inventory of 515 units to get a required production capacity of 1505 units (1650 + 370 - 515 = 1505). Therefore, the correct answer is C, 1505 units.

Quiz 18: Financial Modelling and Pro Forma Analysis

The market size for Loppins is 40 million units.If SPI Inc.has a market share of 40% and the average sales price is $3 per Loppin,what is the dollar amount of sales of SPI?

Use the table for the question(s) below. -The amount of net working capital for Ideko in 2015 is closest to:

Kendo Corp.is projecting sales of $15 million in the coming year.If the size of the market is $50 million,and Kendo's projected market share is 25%,what is the average sale price of its products?

The maximum growth rate that a firm can achieve without issuing new equity or by increasing its debt-to-equity ratio is the firm's sustainable growth rate.

What is minimum required cash?

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2016?

The market size for Loppins is 60 million units.If SPI Inc.has a market share of 20% and the average sales price is $3 per Loppin,what is the dollar amount of sales of SPI?

Use the table for the question(s) below. -The amount of the increase in net working capital for Ideko in 2016 is closest to:

Use the table for the question(s)below. -The amount of net working capital for Ideko in 2016 is closest to:

Use the table for the question(s) below. -The amount of net working capital for Ideko in 2017 is closest to:

The percent of sales method relies on the fact that capacity increases are ,even though in practice such increases are .

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2018?

Kendo Corp.is projecting sales of $14 million in the coming year.If the size of the market is $120 million,and Kendo sells its products for an average sale price of $36.25,what is Kendo's projected market share?

With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2016 is closest to:

With the proper changes it is believed that Ideko's credit policies will allow for an account receivables days of 60.The forecasted accounts receivable for Ideko in 2016 is closest to: A)$14,525 B)$19,690 C)$22,710 D)$16,970 E)$24,560

What is the major shortcoming of the percent of sales method for firms experiencing rapid growth?

What are a firm's options when it generates more cash than planned?

Use the table for the question(s) below. -The amount of the increase in net working capital for Ideko in 2017 is closest to:

The market size for Loppins is 80 million units.If SPI Inc.has a market share of 30% and the average sales price is $2 per Loppin,what is the dollar amount of sales of SPI?

Use the table for the question(s) below. Ideko Sales and Operating Cost Assumptions -Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2017?