A firm has current assets of $1,600, net fixed assets of $6,000, accounts payable of $800, long-term debt of $2,400, equity of $4,400, sales of $7,500, costs of $5, 300, and a tax rate of 35 percent. Assume costs, accounts payable, and current assets all increase at the same rate as sales. Also, assume 60 percent of net income is paid out in dividends and that the firm is currently operating at 90 percent of capacity. If sales grow at 20 percent, compute the external financing need. In your answer prepare an income statement and balance sheet (Insert a Table)
A firm has current assets of $1,600, net fixed assets of $6,000, accounts payable of $800, long-term debt of $2,400, equity of $4,400, sales of $7,500, costs of $5, 300, and a tax rate of 35 percent. Assume costs, accounts payable, and current assets all increase at the same rate as sales. Also, assume 60 percent of net income is paid out in dividends and that the firm is currently operating at 90 percent of capacity. If sales grow at 20 percent, compute the external financing need. In your answer prepare an income statement and balance sheet (Insert a Table)
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
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Transcribed Image Text:A firm has current assets of $1,600, net fixed assets of $6,000, accounts payable of $800, long-term debt of $2,400,
equity of $4,400, sales of $7,500, costs of $5,300, and a tax rate of 35 percent. Assume costs, accounts payable, and
current assets all increase at the same rate as sales. Also, assume 60 percent of net income is paid out in dividends and
that the firm is currently operating at 90 percent of capacity. If sales grow at 20 percent, compute the external financing
need. In your answer prepare an income statement and balance sheet (Insert a Table)
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