Adam's Aeronautics Is Interested in Making Sure It Has Enough

question 225

Essay

Adam's Aeronautics is interested in making sure it has enough money to finance its assets. The company's current assets and fixed assets for the months of January through December are given in the following table. (a) Find the average monthly seasonal and permanent funds requirement.
(b) What is the total cost of financing under the aggressive and conservative strategies. Assume short-term funds costs 4.5 percent and the interest rate for long-term funds is 12 percent.
(c) Find the net working capital under the aggressive and conservative strategies.

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Definitions:

Consolidated Cash

The total cash amount reported on the consolidated financial statements, combining the cash holdings of a parent company and its subsidiaries.

Cash

A form of currency that includes physical bills and coins used in transactions.

Voting Shares

Shares that give the owner the right to vote on company matters, such as electing directors, at shareholder meetings.

Fair Value

Fair value is the estimated market price of an asset or liability, reflecting the amount at which an informed transaction could take place between willing parties.