Problem 4-27 (Algo) Percent-of-sales method [LO4-3]Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balancesheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (includingfixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity.CashAccounts receivable.InventoryCurrent assetsAssetsFixed assetsBalance Sheet (in 5 millions).Liabilities and Stockholders' Equity$5 Accounts payablet2326$ 5443Accrued wagesAccrued taxes.Current liabilitiesNotes payableCommon stockRetained earnings.$97 Total liabilities and stockholders equityAnswer is complete but not entirely correct.New funds21$18511$34131832$ 97Total assetsOwen's Electronics has an aftertax profit margin of 8 percent and a dividend payout ratio of 30 percent.If sales grow by 15 percent next year, determine how many dollars of new funds are needed to finance the growth.Note: Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).

STEP 1By taking into account the expenses associated with creating and selling products, profit…

Answered: Owen's Electronics has nine operating…

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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