2. Baldwin Corp. ended the year carrying $24,239,000 worth of inventory. Had the
ID: 2616593 • Letter: 2
Question
2. Baldwin Corp. ended the year carrying $24,239,000 worth of inventory. Had they sold their entire inventory at their current prices, how many more dollars of contribution margin would it have brought to Baldwin Corp.?
$50,923,040
$24,239,000
$38,288,000
$13,915,000
5. It is January 2nd and senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 75,000 shares of stock plus a new bond issue. Assume the stock can be issued at yesterday’s stock price ($33.61) and leverage changes to 2.8. Which of the following statements are true?
Select all that apply
Equity will be $80,726,008
The total investment for Digby will be $207,925,114
Working capital will remain the same at $10,234,523
Total Assets will rise to $218,974,723
Digby will issue stock totaling $2,520,750
Total liabilities will be $124,678,356
Annual Report BaldwinExplanation / Answer
Solution:
Equity will be $80,726,008
The total investment for Digby will be $207,925,114
Working capital will remain the same at $10,234,523
Digby will issue stock totaling $2,520,750
Stock Price $ 33.61 No. of shares 75000 Leverage 2.8 Total equity= stock price*No. of shares New equity $ 2,520,750.00 Chester will issue stock totaling $2,520,750 Correct Existing Equity $ 78,206,000.00 Total equity=New equity+ old equity $ 80,726,750.00 Equity will be $80,726,750 Correct (in thousands) Current Assets $ 53,871.00 Accounts payable $ 8,649.00 Current Debt $ 34,987.00 Working capital=Current Assets-Accounts payable-Current Debt $ 10,235.00Related Questions
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