Sales IncreaseMaggie's Muffins Bakery generated $2 million in sales during 2018, and its year-end total assets were $1.3 million. Also, at year-end 2018, current liabilities were $1 million,consisting of $300,000 of notes payable, $500,000 of accounts payable, and $200,000 of accruals. Looking ahead to 2019, the company estimates that its assets must increase atthe same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 6%, and its payout ratio will be 50%. How large a sales increase camthe company achieve without having to raise funds externally-that is, what is its self-supporting growth rate? Do not round intermediate calculations. Round the monetary value tothe nearest dollar and percentage value to the nearest whole number.Sales can increase by $that is by

Self Supporting Growth Rate:The highest growth rate that a business may attain without depending on…

Answered: Sales can increase by $ that is by

Business

Finance

Sales can increase by $ that is by

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

See similar textbooks

Related questions

Q: you mean the maximum profit is 2? at solution part you said it is 4 but graphs shows that max profit…

A: You had asked a question initially. The solution was made available. You have noticed a discrepancy.…

Q: which of the following occurs if a company decreases its selling price per unit? a. net income…

A: The contribution margin is calculated as difference between sales and variable costs. The…

Q: uestion 2 Which of the following occurs if a company increases its selling price per unit? (Assume…

A: The contribution margin is calculated as the difference between the sales and variable costs. The…

Q: Sales Beer sales Food sales Other sales Total sales Less cost of sales Gross margin Less marketing…

A: Break even sales cover all fixed and variable costs and at this point, the business earns neither…

Q: able costs are $4 per unit. How m if sales volume is increased by

A: Price per unit = $5 Variable cost = $4 Fixed cost per unit =$2 If sales volume increased by 10…

Q: 5. The contribution nmargin ratio measures the effect on the total contribution margin of a given…

A: Hey there since you have posted multiple questions, we can answer only first three questions, please…

Q: 17. During the current year, the net sales of Regine Company, were 10% below last vear's level. You…

A: There are three types of costs that are fixed, variable, and semi-variable.

Q: 94 From the following data, calculate: Fixed Expenses OMR 12000. Break-Even point OMR 20000. (a) PIV…

A: Cost volume profit analysis is useful to find out the different sales volume on the basis of…

Q: What is the breakeven sales in dollars if : Total sales, $120,000; Total variable cost, $ 48,000;…

A: Contribution margin = Total sales - Total variable cost = 120,000 - 48,000 = $72,000

Q: Find the missing values in the table below with different amount of sales and change in variable…

A: Current sales in dollars for 600 units ; Sales = $154000 Variable expenses = $36000 Contribution…

Q: If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total…

A: Income statement is one of the financial statements that shows profitability, total revenue and…

Q: In the month of March, Blossom Salon services 620 clients at an average price of $120. During the…

A: Variable costs are costs that varies with the change in the level of output whereas fixed costs are…

Q: If a firms expected sales are $256,000 and its break-even sales are $193,000, what will the margin…

A: Margin of safety: The margin of safety indicates how much a company’s sales level can drop before it…

Q: Once sales reach the breakeven point, each additional unit sold will increase fixed cost by a…

Q: With 60 Rs per unit sales price and 45 Rs per unit variable expense, calculate contribution margin %…

A: Based on the given information, Contribution margin % = Sales price-Variable expenseSales…

Q: Cost Analysis is based on the time value of money. This means a dollar today is worth more than a…

A: Cost Analysis is based on Time value of money. This means a dollar today is worth more than a dollar…

Q: Indicate whether the breakeven point will increase or decrease based on the following change (each…

A: Break even point = Fixed costs /Contribution margin per unit where, Contribution margin per unit =…

Q: You have the following data for product X: sales revenue $12,000, variable costs $8,000, allocated…

A: there are various product that are produced combined or in separate so these product whether they…

Q: decreases increases remains th

A: When the selling price per unit decreases, the contribution margin per unit decreases because…

Q: Given the following information, what is the desired profit margin? D/E = 2 current profit margin =…

A: Retention ratio, R = 0.6 Sustainable growth rate = 15% Calculation of ROE:

Q: At this price, we would say the demand is: O Elastic O Unitary O Inelastic Based on this, to…

Q: 39. (2 Suppose variable expenses were to decrease by $3.00 per unit. What effect would this have on…

A: The contribution margin is calculated as difference between sales and variable costs. The break…

Q: :Holding other factors constant, a company's contribution margin per unit will increase with All…

A: The contribution margin represents the portion of sales that is left after the deduction of variable…

Q: Case Study 2: Success Electronics LLC is planning to introduce a low cost smart phone with…

A: Markup = Sales x markup % / (1 + markup %) = 30 x 20% / (1+0.20) = RO 5

Q: What is the revised net operating income if the selling price per unit increases by 20%, variable…

A: Variable Expenses per unit will remain the same Irrespective of the number of units Sold however the…

Q: Compute the contribution margin Using the projected sales for the coming year, compute the margin of…

A: Contribution margin ratio It is calculated by substraction of variable cost from total sales and…

Q: If sales increase from P80.000 per year to P140,000 per year, and if the operating leverage factor…

A: Calculation of Expected Percentage increase in Net Operating Income if sales increase by 75%…

Q: es and price decline, as do the number of compet es continue to increase but at a decreasing rate. T…

A: The right answer is c Sales increases rapidly along with an increase in Product variety.

Q: Once the break-even point is reached: the contribution margin ratio begins to decrease. the total…

A: Solution: At breakeven point: Contribution margin = Fixed costs or net operating income is zero.

Q: .If MR > MC, economic profit increase if output increases True (A False (B

A: If the firm is producing at a quantity where MR > MC,, then it can increase profit by increasing…

Q: Consider a market with the following supply and demand. (It may help to draw a graph for these…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Let: BES= break-even sales, R = revenue per unit, F = fixed costs, V = variable cost per unit, CMR =…

A: Break-even sales shows the amount of sales to generate 0 net income. At this point, total revenue is…

Q: If the gross profit rate on cost is 30%, what is the equivalent rate based on sales? (whole number…

A: Assume, Cost = 100 Then, Profit (100*30%) = 30 Sales (100+30) = 130

Q: Assume fixed costs $825,000. Selling price = $15.25 and variable costs - $8.25. Calculate the dollar…

A: Derired profit per unit = Selling price x 11.1% = $15.25 x 11.1% = $1.69275

Q: ank you. What would the break-even point in sales dollars be?

A: Break even point in sales dollars is calculated as shown below. Break even point in sales…

Q: Holding other factors constant, a company's contribution margin per unit will increase with: O a.…

A: Contribution margin is referred to as that portion of sales revenue which is not absorbed by the…

Q: Sales are 440000 OMR, variable cost = 110000 OMR, profit is 10000 OMR calculate fixed cost a.…

A: Sales = 440000 OMR Variable cost = 110000 OMR Profit = 10000 OMR

Q: If sales volume decreases and all other factors remain constant, then the Multiple Choice margin…

A: Margin of safety = Sales - Break-even sales Break-even point = Fixed cost / Contribution margin…

Q: a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of…

A: Contribution Margin is Sales minus Variable Cost and Contribution Margin Ratio is Contribution…

Q: f. If the selling price increases by $4 per unit and the sales volume decreases by 200 units, what…

A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Q: 3. A company has return on sales of 20%, income of $50,000, selling price of $10, and a contribution…

A: Solution.. Income = $50,000 Return on sales = 20% Contribution margin ratio = 40% Selling price…

Q: Part 2. Rhiner Company prepared the following contribution format income statement based on a sales…

A: Contribution margin income statement is an income statement which shows contribution margin amount…

Q: The price of Houndles, a consumer product, has recently been increased. The effect of this has been…

A: The impact of increase in price on total revenue is given. We have to find the nature of demand in…

Question

Sales Increase
Maggie's Muffins Bakery generated $2 million in sales during 2018, and its year-end total assets were $1.3 million. Also, at year-end 2018, current liabilities were $1 million,
consisting of $300,000 of notes payable, $500,000 of accounts payable, and $200,000 of accruals. Looking ahead to 2019, the company estimates that its assets must increase at
the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 6%, and its payout ratio will be 50%. How large a sales increase cam
the company achieve without having to raise funds externally-that is, what is its self-supporting growth rate? Do not round intermediate calculations. Round the monetary value to
the nearest dollar and percentage value to the nearest whole number.
Sales can increase by $
that is by

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: About the Question

VIEW

Step 2: Calculation of Self Supporting Growth rate

VIEW

Step 3: Calculation of Increase in sales

VIEW

Solution

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

What is the break-even point in sales dollars? Break-even point $
2. Conceptual Connection: Compute net profit margin for ERS. Round your answer to one decimal place. 6.6 % A If ERS is able to increase its service revenue by $100,000, what should be the effect on future income? If ERS had an incremental increase in revenue of $100,000, based on the net profit margin computed, what is the additional potential profit? 3. Conceptual Connection: Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS' future profitability? A declining profit margin implies that ERS is having difficulty maintaining control over its expenses.
From the following data, calculate: Fixed Expenses OMR 12000. Break-Even point OMR 20000. (a) P I V Ratio. (b) Profit when sales are OMR 80000 & V.C is OMR 18000. (Variable cost per unit OMR 36) (c) New break-even point if selling price is increased by 20%.
Which of the following changes to a company's contribution income statement will always lower the break-even point (either in units or in dollars)? Sales price increases by 10%. Variable costs decrease by 5% and fixed costs increase by 10%. Variable costs increase by 10% and fixed costs decrease by 5%. Sales price decreases by 5%.
When sales volume is rising do companies with a larger percentage of variable expenses or companies with a larger percentage of fixed expenses experience a larger percentage increase in profit? Explain your reasoning.
Find the missing values in the table below with different amount of sales and change in variable expense accordingly. From the given below data find the Contribution ratio. What will be impact on Breakeven if sales increases. Items Current Sales in additional sales in Percentage dollars for 600 dollars with 720 of Sales units units Sales 1,54,000 1,76,000 ? Variable 36,000 10 percent increase ? Expenses in previous expense Contribution ? Margin Fixed Expenses 25,000 25000 Net Income or ? ? ? Los b) Harsha Ltd. Corporation wants to know about the variance in production cost it is noted that mostly variance is related to labor variance. Actual labor hours consumed are 28 hours at the rate of 12 dollars per hour. While standard hours was 41 hours with standard rate of 20 per hour. You are required to find the Labor Efficiency Variance, Labor rate Variance. Interpret your results.
Please answer 2.4 and 2.5
more, the cost drops to $70 per unit Should KIA take advantage of the quantity discount?
Suppose that the profit (in dollars) from the sale of Kisses and Kreams is given by P(x, y) = 10x + 6.9y-0.001x²-0.045y² where x is the number of pounds of Kisses and y is the number of pounds of Kreams. Find P/ay, and give the approximate rate of change of profit with respect to the number of pounds of Kreams that are sold if 100 pounds of Kisses and 14 pounds of Kreams are currently being sold. (Give an exact answer. Do not round.) What does this mean? If the number of pounds of Kisses is held constant and the number of pounds of Kreams is increased from 14 to 15, the profit will increase by approximately $ Need Help? Read It Watch it
(20 pts) Given: Selling price $50/unit, total fixed expenses $95,000, variable expenses $40/unit. A) Find the BEP in Units and in Dollars. Assume the above variable expenses are reduced by 25% and the total fixed expenses are increased by 10%. B) Find the sales in units to achieve a profit of $30,000 assuming that the selling price stays the same. C) Find the net income if activity volume increases by 20%, assuming total sales are $32,000, variable expenses are $12,000, and fixed expenses are $20,000. (Unrelated to A&B)
Given that sales are R5000000, Gross profit is R1 500 000. Therefore, cost of sales is R 2500000. Select one: O True O False
If Sales for the last year was Rs. 40,00,000 and variable cost ratio is 80%. What will be the new contribution if the sales increase by 20%? Oa.10,50,000 O b. 9,60,000 O c. 9,20,000 O d. 8,00,000

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS