In the Table Below Is Selected Information for Sprigue Company

question 53

Essay

In the table below is selected information for Sprigue Company.

All figures are in thousands and represent expectations of the future. $$\begin{array} { l r l r r r } \text { Year } & 2005 & 2006 & 2007 & 2008 & 2009 \\\text { Net income } & \$ 5,175 & \$ 6,210 & \$ 7,462 & \$ 8,570 & \$ 8,998 \\\text { Dividends } & 773 & 932 & 1,118 & 1,285 & 2,250 \\\text { Depreciation } & 621 & 702 & 793 & 896 & 1,013 \\\text { Increase in working capital } & 675 & 1,035 & 1,242 & 1,118 & 428 \\\text { Capital expenditures } & 5,625 & 8,625 & 10,350 & 9,315 & 3,571 \\\text { New debt issued } & 900 & 4,500 & 5,500 & 3,900 & 0 \\\text { Old debt retired } & 987 & 750 & 990 & 2,000 & 2,000 \\\text { New equity issued } & 1,823 & 0 & 0 & 0 & 0\end{array}$$
a. Calculate the expected free cash flow to equity for the years 2005 to 2009.
b. Explain the expected changes in debt levels over the five years.

Recognize examples of "metering" strategy in various industries.

Evaluate the legal considerations in volume discounts through the lens of the Robinson-Patman act.

Grasp the differentiation between individual and aggregate demand.

Understand the implications of customer loyalty programs on consumer behavior.

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Definitions:

Grade Point Average

A numerical calculation representing the average value of the accumulated final grades earned in courses over time.

Upper Class

In statistics, this often refers to the highest interval or category in a distribution; in sociology, it refers to the group of individuals at the top of a social hierarchy based on wealth, education, or power.

P(A|B)

The probability of event A occurring given that event B has occurred.

Multiple Vehicles

Refers to scenarios or systems where more than one vehicle (e.g., cars, bicycles, aircraft) are used or considered, often in logistics or transportation studies.