Fundamentals of Financial Management (Concise 6th Edition)

Appendix A Solutions to Self-Test Questions and Problems A-23

New conditions:

__________Sales

Inventories

! __________$100

Inventories

! 4,

so

New level of inventories! $100/4! $25 million.

Therefore,

Excess inventories! $33.3 " $25! $8.3 million.

Forecast of funds needed:

∆S! 0.2($100 million)! $20 million

AFN! 1.5167($20) " 0.4($20) " 0.1($120)(0.55) " $8.3

! $30.3 " $8 " $6.6 " $8.3

! $7.4 million

Chapter 17

Euros_____

C$

! Euros_____

US$

$ US$____

C$

! 0.65____

$1

$ ____0.98$1! 0.65 ____0.98! 0.6633 euro per Canadian dollar

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