**Finance homework question. Cannot copy so screen shot pasted below, several sm
ID: 2425254 • Letter: #
Question
**Finance homework question. Cannot copy so screen shot pasted below, several small parts. Thanks!
Do Homework-Michael Bonincontri-Internet Explorer https://www.mathxl.com/Student/PlayerHomework aspx?homeworkId=333588458&questionId;=1&flushed-false;& Id=3675779¢erwin;=yes&fromPlayerCheck;=yes Michael Bonincontri 2/21/16 3:15 P Homework: Assignment 6 Overview 9 (10 P11-10 (similar to) Exercise Score: 0 of 10 pts Assignment Score: 10% (10 of 100 pts) 1 of 10 complete Change in net working capital calculation Samuels Manufacturing is considering the purchase of a new machine to replace one it believes is obsolete. The firm has total current assets L of $910,000 and total current liabilities of S647,000. As a result of the proposed replacement, the following changes are anticipated in the levels of the current asset and current liability accounts noted 1 2 3 Account Change + $40,000 Accruals Marketable securities Inventories Accounts pavable Notes payable Accounts receivable Cash -20.000 + 85,000 0 + 149,000 + 11,000 a. Using the information given, calculate any change in net working capital that is expected to result from the proposed replacement action b. Explain why a change in these current accounts would be relevant in determining the initial investment for the proposed capital expenditure c. Would the change in net working capital enter into any of the other cash flow components that make up the relevant cash flows? Explain Enter your answer in the answer box, then click Check Answer. 2 parts remaining Clear AI Check Answer Save 2:15 PM 2/21/2016 Finance f... Course H... Do Hom... Untitled UntitledExplanation / Answer
Answer for subpoint a:
Its given that dividend is declared only if the earnings are positive. So, the EPS of 2012 is $2.63. As the firm follows constant dividend policy, for the year 2012 also 40% is to be paid = $2.63*40% =$1.052.
Answer for subpoint b:
From the above calculation table, it is clear that dividend payout for the last two years to 2012 is less than 50% of EPS. So, dividend for the year 2012 would be $1.10.
Answer for question no.c:
The EPS for the year 2012 is $2.63. As the EPS did not exceed $3.00, dividend for the year would be $0.50.
Answer for question no.d:
Year EPS 50% 0f EPS Dividend 2010 $2.31 $1.16 $1.00 2011 $3.65 $1.83 $1.00 2012 $2.63 $1.32 $1.00Related Questions
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