Current Assets Investment Policy Assignment

CURRENT ASSETS INVESTMENT POLICY UNLIMITED Courses Rentz Corporation is investigating the optimal level of current assets for the coming year. Management expects sales to increase to approximately $4 million as a result of an asset expansion presently being undertaken. Fixed assets total $1 million, and the firm plans to maintain a 55% debt-to-assets ratio. Rentz’s interest rate is currently 10% on both short-term and long-term debt (which the firm uses in its permanent structure). Three alternatives regarding the projected current assets level are under consideration: (1) a restricted policy where current assets would be only 45% of projected sales,

(2) a moderate policy where current assets would be 50% of sales, and

(3) a relaxed policy where current assets would be 60% of sales. earnings before wwse Catalog A-Z tner Offers interest and taxes should be 10% of total sales, and the federal-plus-state tax rate is 40% nt Options

a. What is the expected return on equity under each current assets level? Round your answers to two decimal places. ege Skills Restricted policy Moderate policy reer Readiness Relaxed policy

b. In this problem, we assume that expected sales are independent of the current assets investment policy. Is this a valid assumption?

I. Yes, sales are controlled only by the degree of marketing effort the firm uses, irrespective of the current asset policies it employs.

II. Yes, the current asset policies followed by the firm mainly influence the level of long-term debt used by the firm

IIIL. Yes, the current asset policies followed by the firm mainly influence the level of fixed assets.

IV. No, this assumption would probably not be valid in a real world situation. A firm’s current asset policies may have a significant effect on sales. e Feedback

V. Yes, this assumption would probably be valid in a real world situation. A firm’s current asset policies have no significant effect on sales. -Select-

C. How would the firm’s risk be affected by the different policies? The input in the box below will not be graded, but may be reviewed and considered by your instructor. Get Finance homework help today

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
English 101
Good job
Customer 454209, June 2nd, 2020
Good journal.
Customer 459947, May 10th, 2022
Excellent work!
Customer 463469, October 17th, 2022
The work was of amazing quality and was even better than I could have imagined.
Customer 454439, June 1st, 2020
good job
Customer 456821, January 5th, 2022
Construction Management
Customer 462679, March 14th, 2022
Leadership Studies
It was really well written!
Customer 453975, February 28th, 2020
Interior Decoration
Few edits needed
Customer 463337, November 9th, 2022
I received a MA which is mastered on the rewrite.
Customer 463143, July 10th, 2022
Healthcare & Medical
Excellent work!
Customer 463337, November 18th, 2022
Leadership Studies
Thanks! Looks Great!
Customer 453375, December 4th, 2021
Business Studies
Customer 453413, April 16th, 2020
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat