Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Textbook Question
Chapter 9, Problem 5P
Long-Term Financing Needed
At year-end 2018, Wallace Landscaping’s total assets were $2.17 million, and its accounts payable were $560,000. Sales, which in 2018 were $3.5 million, are expected to increase by 35% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $625,000 in 2018, and
- a. What were Wallace’s total long-term debt and total liabilities in 2018?
- b. How much new long-term debt financing will be needed in 2019?
[Hint: AFN – New stock = New long-term debt.)
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Chapter 9 Solutions
Intermediate Financial Management (MindTap Course List)
Ch. 9 - Define each of the following terms:
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