The NANA Corporation has made the Two-year projection of its asset investment given in the following table. It has found

The NANA Corporation has made the Two-year projection of its asset investment given in the following table. It has found that payables and accruals tend to equal one third of current assets. It currently has birr 30 million in equity and the remainder of its financing is provided by long-term debt. The earnings retained amount to birr1 million per quarter.
DATEFIXED ASSETS(in millions)CURRENT ASSETS(in millions)
3/31/2001 (now)Birr 50Birr 21
6/30/2001 51 30
9/30/2001 52 26
12/31/2001 53 25
3/31/2002 54 21
6/30/2002 55 22
9/30/2002 56 31
12/31/2002 57 26
RequiredGraph the time path of (i) fixed assets and (ii) total assets (less amount financed spontaneously by payables and accruals).Devise a financing plan, assuming that your objective is to use a hedging (maturity matching) approach.LALA Ltd. supplies the following information’s for calculating the working capital firm levels of activity of 240,000 units. The cost structure particulars are: Cost Per Unit Birr Raw materials 30 Direct labor 10 Over-heads 20 Total 60 Profit 15 Selling price 75
Raw materials are in store on average for 1 month.Work in process (100% complete in regard to materials and 50% for labor and overheads for half a month’s production.Finished goods remain in godown on average for a month.Suppliers one month to customers 2 months (calculation of customers may be made on selling price).Minimum cash balance required is birr, 30,000.The production is evenly throughout the year.


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