A firm had the following balance sheet last year: Cash $800 Accounts payable $350 Accounts receivable Inventory 450 Accrued wages 150 950 Notes payable 2,000 Net fixed assets 34,000 Mortgage 26,500 Common stock 3,200 Retained earnings 4,000 Total assets $36,200 Total liabilities and equity $36,200 Sales to triple from $10,000 to $30,000, increasing net income to $1,000. No additional fixed assets will be needed. The firm pays a 20% dividend. (1) Will any outside capital be needed? (2) If so, how much? Select one: O A. Yes; $9,700 OB. Yes; $2,600 OC. Yes; $2,900 OD. No; there will be a $2,400 surplus. O E. Yes; $3,200 ?
A firm had the following balance sheet last year: Cash $800 Accounts payable $350 Accounts receivable Inventory 450 Accrued wages 150 950 Notes payable 2,000 Net fixed assets 34,000 Mortgage 26,500 Common stock 3,200 Retained earnings 4,000 Total assets $36,200 Total liabilities and equity $36,200 Sales to triple from $10,000 to $30,000, increasing net income to $1,000. No additional fixed assets will be needed. The firm pays a 20% dividend. (1) Will any outside capital be needed? (2) If so, how much? Select one: O A. Yes; $9,700 OB. Yes; $2,600 OC. Yes; $2,900 OD. No; there will be a $2,400 surplus. O E. Yes; $3,200 ?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![A firm had the following balance sheet last year:
Cash
$800 Accounts payable
$350
Accounts receivable
Inventory
450 Accrued wages
150
950
Notes payable
2,000
Net fixed assets
34,000
Mortgage
26,500
Common stock
3,200
Retained earnings
4,000
Total assets
$36,200 Total liabilities and equity $36,200
Sales to triple from $10,000 to $30,000, increasing net income to $1,000. No additional fixed assets will be needed. The firm pays a
20% dividend. (1) Will any outside capital be needed? (2) If so, how much?
Select one:
O A. Yes; $9,700
OB. Yes; $2,600
OC. Yes; $2,900
OD. No; there will be a $2,400 surplus.
O E. Yes; $3,200
?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F72b8e973-8084-4334-8b8e-362b0bd9d9fb%2F7819dbc9-d1bc-4444-916a-2d5dfa586bfc%2Fddpiub_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A firm had the following balance sheet last year:
Cash
$800 Accounts payable
$350
Accounts receivable
Inventory
450 Accrued wages
150
950
Notes payable
2,000
Net fixed assets
34,000
Mortgage
26,500
Common stock
3,200
Retained earnings
4,000
Total assets
$36,200 Total liabilities and equity $36,200
Sales to triple from $10,000 to $30,000, increasing net income to $1,000. No additional fixed assets will be needed. The firm pays a
20% dividend. (1) Will any outside capital be needed? (2) If so, how much?
Select one:
O A. Yes; $9,700
OB. Yes; $2,600
OC. Yes; $2,900
OD. No; there will be a $2,400 surplus.
O E. Yes; $3,200
?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education