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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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Answer the first question. The second picture is the formula
Spontaneous
increase in
current
liabilities
Increase in
retained
eamings
Additional
fund
needed
projected
increase in)
assets
projected
increase in
Change in
sales
current assets
(present)
Sales (present)
%3D
assets
Spontaneous
increase in current
Change in
sales,
current liabilities
(present)
%3D
liabilities
Sales (present)
Increase in,
Earnings
after tax
retained
Dividend payment
earnings
Transcribed Image Text:Spontaneous increase in current liabilities Increase in retained eamings Additional fund needed projected increase in) assets projected increase in Change in sales current assets (present) Sales (present) %3D assets Spontaneous increase in current Change in sales, current liabilities (present) %3D liabilities Sales (present) Increase in, Earnings after tax retained Dividend payment earnings
Compute the additional funds needed.
JHOPE "I am your hope" Company has 10%
net profit margin on sales in previous years
and expects to maintain the
same next year. The Business is expected to
increase its sales level from P1,000,000 to P1
255 000.
The percentages of current sales and current
liabilities that have direct relationship with
sales are 60% and 35%,
respectively. Out of the total earnings at are
expected to be realized next year, 25% will be
retumed to the shareholders
in the form of dividends.
Compute the following:
5. Projected increase in current assets
6. Spontaneous increase in current liabilities
7. Increase in retained earings
8. Additional fund needed.
Transcribed Image Text:Compute the additional funds needed. JHOPE "I am your hope" Company has 10% net profit margin on sales in previous years and expects to maintain the same next year. The Business is expected to increase its sales level from P1,000,000 to P1 255 000. The percentages of current sales and current liabilities that have direct relationship with sales are 60% and 35%, respectively. Out of the total earnings at are expected to be realized next year, 25% will be retumed to the shareholders in the form of dividends. Compute the following: 5. Projected increase in current assets 6. Spontaneous increase in current liabilities 7. Increase in retained earings 8. Additional fund needed.
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