Monthly Archives: September 2013

Jungle Inc., has a target debt-equity ratio of .80 -

Jungle Inc., has a target debt-equity ratio of .80. Its WACC is 9.8 percent, and the tax rate is 35 percent. a. If Jungle’s cost of equity is 14 percent, what is its pretax cost of debt? b. If instead … Continue reading

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Mullineaux Corporation has a target capital structure of 50 percent common stock, 10 percent preferred stock, and 40 percent debt

Mullineaux Corporation has a target capital structure of 50 percent common stock, 10 percent preferred stock, and 40 percent debt. Its cost of equity is 16 percent, the cost of preferred stock is 7.5 percent, and the cost of debt … Continue reading

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Moldova Beef Farm issued a 25-year, 9 percent semiannual bond 7 years ago -

Moldova Beef Farm issued a 25-year, 9 percent semiannual bond 7 years ago. The bond currently sells for 108 percent of its face value. The company’s tax rate is 35 percent. a. What is the pretax cost of debt? b. … Continue reading

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The following inventory data relate to Susquehanna Corp. -

The following inventory data relate to Susquehanna Corp.: Inventories Ending Beginning Finished goods $75,000 $110,000 Work in Process $80,000 $70,000 Direct Materials $95,000 $90,000 Revenues and costs for the period sales $900,000 Cost of goods available for sale $775,000 Total … Continue reading

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The following data are taken from the general ledger and other records of Dakota Manufacturing Company on January 31, the end of the first month of operations in the current fiscal year -

The following data are taken from the general ledger and other records of Dakota Manufacturing Company on January 31, the end of the first month of operations in the current fiscal year: Sales- $75,000 Materials Inventory (Jan 1st) – $22,000 … Continue reading

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Grand Valley Apparel Company uses a job order cost system -

Grand Valley Apparel Company uses a job order cost system. The following data summarizes the operations related to production for May 2010, the first month of operations: a. Materials purchased on account, $68,000 b. Materials requisitioned and factory labor used … Continue reading

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The Volt Battery Company has forecast its sales in units as follows -

The Volt Battery Company has forecast its sales in units as follows: Jan- 800 May- 1,350 Feb- 650 June- 1,500 March- 600 July- 1,200 April- 1,100 Volt Battery always keeps an ending inventory equal to 120 percent of the next … Continue reading

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Lansing Auto Parts, INC, has projected sales of $25,000 in October, $35,000 in November, and $30,000 in December -

Lansing Auto Parts, INC, has projected sales of $25,000 in October, $35,000 in November, and $30,000 in December. Of the company’s sales, 20 percent are paid for by cash and 80 percent are sold on credit. The credit sales are … Continue reading

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Pirate Video Company has made the following sales projections for the next six months -

Pirate Video Company has made the following sales projections for the next six months. All sales are credit sales: March- $24,000 June- $28,000 April- $30,000 July- $35,000 May- $18,000 August- $38,000 Sales in January and February were $27,000 and $26,000, … Continue reading

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Dress Company has forecast its sales in units as follows -

Dina’s Dress Company has forecast its sales in units as follows: January-1000 February-800 March-900 April-1400 May-1556 Dina always keeps an ending inventory equal to 120% of the next month’s expected sales. The ending inventory for December (January’s beginning inventory) is … Continue reading

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