Creative Analysis, Inc. is currently operating at maximum capacity. Assume that all costs and net working capital vary directly with sales. The dividend payout ratio will remain constant. How much is the External Financing needed (EFN) if sales are projected to increase by 10%? Income Statement end of last year: Sales Costs Net Income Dividends paid = $324 Balance Sheet as of end of last year: Cash Accounts Receivables Inventory Net Fixed Assets Total assets -$25.1 $156.1 $296.5 $8,500 $7,960 $540 -$67.6 O $274.9 Assets $1,600 $975 $2,425 $2,200 $7,200 Accounts Payable Long-Term Debt Common Stock Retained Earnings Total Liabilities & Equity Liabilities & Equity $2,075 425 $3000 $1,700 $7,200
Creative Analysis, Inc. is currently operating at maximum capacity. Assume that all costs and net working capital vary directly with sales. The dividend payout ratio will remain constant. How much is the External Financing needed (EFN) if sales are projected to increase by 10%? Income Statement end of last year: Sales Costs Net Income Dividends paid = $324 Balance Sheet as of end of last year: Cash Accounts Receivables Inventory Net Fixed Assets Total assets -$25.1 $156.1 $296.5 $8,500 $7,960 $540 -$67.6 O $274.9 Assets $1,600 $975 $2,425 $2,200 $7,200 Accounts Payable Long-Term Debt Common Stock Retained Earnings Total Liabilities & Equity Liabilities & Equity $2,075 425 $3000 $1,700 $7,200
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
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Transcribed Image Text:Creative Analysis, Inc. is currently operating at maximum capacity. Assume that all costs and net
working capital vary directly with sales. The dividend payout ratio will remain constant. How much is
the External Financing needed (EFN) if sales are projected to increase by 10%?
Income Statement end of last year:
Sales
$8,500
Costs
$7,960
Net Income $540
Dividends paid = $324
Balance Sheet as of end of last year:
Cash
Accounts Receivables
Inventory
Net Fixed Assets
Total assets
-$25.1
$156.1
O $296.5
-$67.6
O $274.9
Assets
$1,600
$975
$2,425
$2,200
$7,200
Accounts Payable
Long-Term Debt
Common Stock
Retained Earnings
Total Liabilities &
Equity
Liabilities & Equity
$2,075
425
$3000
$1,700
$7,200
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