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It is January 2nd and senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true?

a. Total liabilities will be $132,709,346
b. The total investment for Baldwin will be $12,728,474
c. Working capital will remain the same at $12,936,641
d. Baldwin's long term debt will rise by $10,000,000
e. Total assets will rise to $212,378,526

User Myon
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Answer:

b.The total investment for Baldwin will be $12,728,474

User Sanity
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