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[SOLVED]It is January 2nd and senior management of Digby meets to determine their investment plan for the year.

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 $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.8. Which of the following statements are true? Select all that apply.

Select : 3

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  •  The total investment for Digby will be $197,268,569
  •  Total liabilities will be $130,351,191
  •  Digby’s long-term debt will rise by $9,000,000
  •  Working capital will remain the same at $13,161,749
  •  Total Assets will rise to $215,368,657



honeyd


16-03-21 | 13:40:23

current total liability+10m
Digby’s long-term debt will rise by $9,000,000[wrong, it will grow by 10M+]
Current asset+10M
Working capital=current asset-current liability
Current investiment+10M

CORRECT ANSWERS
Total liabilities will be $130,351,191
Working capital will remain the same at $13,161,749


honeyd


16-03-21 | 14:56:53

Working capital=51708-38547=13161

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