The most recent financial statements for Assouad, Incorporated, are shown here:Balance SheetIncome StatementSalesCostsTaxable incomeTaxes (25%)$ 9,600 Current assets6,200 Fixed assets$ 3,400850$ 4,200 Current liabilities10,400 Long-term debtEquity$ 1,9003,8008,900Total$ 14,600Total$ 14,600Net income$ 2,550Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 15 percent.What is the external financing needed?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.External financing needed

Step 1: Calculate the increase in sales:Current sales: $9,600Projected sales increase: 15%Increase…

Answered: The most recent financial statements…

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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The most recent financial statements for Assouad, Incorporated, are shown here: Income Statement Balance Sheet Sales $ 8,700 Current assets $ 4,200 Current liabilities $ 1,900 Costs 5,600 Fixed assets 10,400 Long-term debt 3,800 Taxable income $ 3,100 Equity 8,900 Taxes (25%) 775 Total $ 14,600 Total $ 14,600 Net income $ 2,325 Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. As with every other firm in its industry, next year’s sales are projected to increase by exactly 15 percent. What is the external financin

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