How much external financing is needed for a 25% increase in sales if Lizard & Co. is currently operating at full capacity? Assume only costs and total assets increase with sales, with no new current liabilities, debt, or stock needed. Use Exhibit II. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b d $0 M $38.0 M $402.0 M $440.0 M
How much external financing is needed for a 25% increase in sales if Lizard & Co. is currently operating at full capacity? Assume only costs and total assets increase with sales, with no new current liabilities, debt, or stock needed. Use Exhibit II. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b d $0 M $38.0 M $402.0 M $440.0 M
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
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Transcribed Image Text:How much external financing is needed for a 25% increase in sales if Lizard & Co. is currently operating at full capacity? Assume
only costs and total assets increase with sales, with no new current liabilities, debt, or stock needed. Use Exhibit II.
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
b
d
$0 M
$38.0 M
$402.0 M
$440.0 M
Transcribed Image Text:Sales
Costs
Taxable Income
Taxes
Net Income
Retained Earnings
Dividends
Lizard & Co.
Balance Sheet
($ in millions)
Assets
Current Assets
Cash
Accounts Receiv.
Inventory
Total Current
Net Fixed Assets
Net PP&E
Total Assets
Year 1
420
360
60
20
40
40
10
Year 1
20
52
120
192
160
352
Year 2
525
450
75
25
50
50
12.5
Year 2 Current Liabilities
25
Accounts Payable
65
Notes Payable
150
Total
240
Long Term Debt
440
Growth Rate
+25%
200 Owners Equity
Common Stock
Retained Earnings
Total
Total Liabilities/Equity
Year 1
30
40
70
80
112
90
202
352
Year 2
30
40
70
80
112
90+50
252
402
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