Key factors on which external financing depends, as indicated in additional fund needed equation. Additional fund needed: Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company. However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 17, Problem 1Q

Summary Introduction

To explain: Key factors on which external financing depends, as indicated in additional fund needed equation.

Additional fund needed:

Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company.

However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Expert Solution & Answer

Answer to Problem 1Q

Key factors on which external financing depend are as follows:

Payout ratio:

Payout ratio is the fraction of dividend and net income. It is the amount of dividend that has to be paid to the shareholders out of the net income of the year.

Sales growth rate:

Sales growth rate means the growth rate in which the sales of a company grow per year.

Capital intensity ratio:

Capital intensity ratio is the ratio that helps to find the amount of capital a company needed to invest in its assets so that company has enough assets to meet its sales target. It helps to find out the amount of capital a company can invest into its assets.

Profit margin:

Profit margin is the excess of total sales revenue over the total cost. Profit margin is the difference between net sales and cost.

Days sales outstanding:

Days sales outstanding means the number of days a company needed to pay off to its suppliers.

Explanation of Solution

The payout ratio is a key factor of additional fund needed to know whether the company has enough net income to pay off the dividends to its shareholders. It helps to know the company’s profitability and company’s ability to pay off the dividends to its shareholders.
Every company’s main motive is to earn maximum profit. A company cannot survive without earning a profit. The profit margin is a key factor of additional fund needed because the company needs additional funding to increase its operations, which results in profit margin.
Sales growth rate is a key factor of external financing because the company needs additional funding to increase its assets so that company can increase its sales and expand its operations.
Capital intensity ratio is a key factor of additional needed fund so that the company can determine the amount of additional capital a company needed to invest into its assets.
Day’s sales outstanding are a key factor of external funds because it helps a company to determine the number of days available with a company to pay off to its suppliers.

Conclusion

External financing depends on payout ratio, sales growth rate, capital intensity ratio, profit margin, and days sales outstanding.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

lab.infoseclearning.com/console/5061763/3047 310-win10 Project Three Milestone - GNS3 File Edit View Control Node Annotate Tools Help e 41 Sales_PC1 0000 Sales_PC2 Sales_PC3 Enforce US Keyboard Layout View Fullscreen Send Ctrl+Alt+Delete Reboot To exit full screen, press and hold esc ■C00/6@ Q Sales_Switch Human Resources_Switch Office_Router Sales PC4 Customer_Service_Switch X: -299.0 Y: -136.0 Z: 1.0 H Type here to search CS_FTP_Server HR_PC2 HR_PC1 7:19 PM 12/14/2024 B

AGG is a US multinational that manufactures specialist high tech parts in the airline engine industry. AGG is an established company with steady growth in turnover and dividends over the last 10 years. The company is undertaking a projected titled Project Big as a strategic response to the changing market scene. AGG will develop a new state of the art highly automated plant located in Cambodia which is expected to result in cost advantages if it is implemented. The details about the project are below • Initital investment has been estimated at $500m • • The annual pre tax savings in operating costs at current exchange rates has been calculated at $150m for the first four years (starting in the first year) The residual value of the project at the end of the four years is estimated to be $250m The initial investment, net of residual value, qualifies for capital allowance and can be claimed back on a straight line basis over the four years of the project. Current AGG's cost of capital is…

You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in twenty-six equal annual installments beginning immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. Calculate the present value of the payments you will receive. Show your calculations using formulas in your paper or provide how to do the calculations in Excel. Explain why there is a difference between the present value of the Strayer lottery jackpot and the future value of the twenty-six annual payments based on your calculations and the information provided.

Answer 2

Question

Chapter 17, Problem 1Q

Summary Introduction

To explain: Key factors on which external financing depends, as indicated in additional fund needed equation.

Additional fund needed:

Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company.

However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Expert Solution & Answer

Answer to Problem 1Q

Key factors on which external financing depend are as follows:

Payout ratio:

Payout ratio is the fraction of dividend and net income. It is the amount of dividend that has to be paid to the shareholders out of the net income of the year.

Sales growth rate:

Sales growth rate means the growth rate in which the sales of a company grow per year.

Capital intensity ratio:

Capital intensity ratio is the ratio that helps to find the amount of capital a company needed to invest in its assets so that company has enough assets to meet its sales target. It helps to find out the amount of capital a company can invest into its assets.

Profit margin:

Profit margin is the excess of total sales revenue over the total cost. Profit margin is the difference between net sales and cost.

Days sales outstanding:

Days sales outstanding means the number of days a company needed to pay off to its suppliers.

Explanation of Solution

The payout ratio is a key factor of additional fund needed to know whether the company has enough net income to pay off the dividends to its shareholders. It helps to know the company’s profitability and company’s ability to pay off the dividends to its shareholders.
Every company’s main motive is to earn maximum profit. A company cannot survive without earning a profit. The profit margin is a key factor of additional fund needed because the company needs additional funding to increase its operations, which results in profit margin.
Sales growth rate is a key factor of external financing because the company needs additional funding to increase its assets so that company can increase its sales and expand its operations.
Capital intensity ratio is a key factor of additional needed fund so that the company can determine the amount of additional capital a company needed to invest into its assets.
Day’s sales outstanding are a key factor of external funds because it helps a company to determine the number of days available with a company to pay off to its suppliers.

Conclusion

External financing depends on payout ratio, sales growth rate, capital intensity ratio, profit margin, and days sales outstanding.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 17, Problem 1Q

Summary Introduction

To explain: Key factors on which external financing depends, as indicated in additional fund needed equation.

Additional fund needed:

Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company.

However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Expert Solution & Answer

Answer to Problem 1Q

Key factors on which external financing depend are as follows:

Payout ratio:

Payout ratio is the fraction of dividend and net income. It is the amount of dividend that has to be paid to the shareholders out of the net income of the year.

Sales growth rate:

Sales growth rate means the growth rate in which the sales of a company grow per year.

Capital intensity ratio:

Capital intensity ratio is the ratio that helps to find the amount of capital a company needed to invest in its assets so that company has enough assets to meet its sales target. It helps to find out the amount of capital a company can invest into its assets.

Profit margin:

Profit margin is the excess of total sales revenue over the total cost. Profit margin is the difference between net sales and cost.

Days sales outstanding:

Days sales outstanding means the number of days a company needed to pay off to its suppliers.

Explanation of Solution

The payout ratio is a key factor of additional fund needed to know whether the company has enough net income to pay off the dividends to its shareholders. It helps to know the company’s profitability and company’s ability to pay off the dividends to its shareholders.
Every company’s main motive is to earn maximum profit. A company cannot survive without earning a profit. The profit margin is a key factor of additional fund needed because the company needs additional funding to increase its operations, which results in profit margin.
Sales growth rate is a key factor of external financing because the company needs additional funding to increase its assets so that company can increase its sales and expand its operations.
Capital intensity ratio is a key factor of additional needed fund so that the company can determine the amount of additional capital a company needed to invest into its assets.
Day’s sales outstanding are a key factor of external funds because it helps a company to determine the number of days available with a company to pay off to its suppliers.

Conclusion

External financing depends on payout ratio, sales growth rate, capital intensity ratio, profit margin, and days sales outstanding.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 17, Problem 1Q

Summary Introduction

To explain: Key factors on which external financing depends, as indicated in additional fund needed equation.

Additional fund needed:

Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company.

However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Expert Solution & Answer

Answer to Problem 1Q

Key factors on which external financing depend are as follows:

Payout ratio:

Payout ratio is the fraction of dividend and net income. It is the amount of dividend that has to be paid to the shareholders out of the net income of the year.

Sales growth rate:

Sales growth rate means the growth rate in which the sales of a company grow per year.

Capital intensity ratio:

Capital intensity ratio is the ratio that helps to find the amount of capital a company needed to invest in its assets so that company has enough assets to meet its sales target. It helps to find out the amount of capital a company can invest into its assets.

Profit margin:

Profit margin is the excess of total sales revenue over the total cost. Profit margin is the difference between net sales and cost.

Days sales outstanding:

Days sales outstanding means the number of days a company needed to pay off to its suppliers.

Explanation of Solution

The payout ratio is a key factor of additional fund needed to know whether the company has enough net income to pay off the dividends to its shareholders. It helps to know the company’s profitability and company’s ability to pay off the dividends to its shareholders.
Every company’s main motive is to earn maximum profit. A company cannot survive without earning a profit. The profit margin is a key factor of additional fund needed because the company needs additional funding to increase its operations, which results in profit margin.
Sales growth rate is a key factor of external financing because the company needs additional funding to increase its assets so that company can increase its sales and expand its operations.
Capital intensity ratio is a key factor of additional needed fund so that the company can determine the amount of additional capital a company needed to invest into its assets.
Day’s sales outstanding are a key factor of external funds because it helps a company to determine the number of days available with a company to pay off to its suppliers.

Conclusion

External financing depends on payout ratio, sales growth rate, capital intensity ratio, profit margin, and days sales outstanding.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1Q

Summary Introduction

To explain: Key factors on which external financing depends, as indicated in additional fund needed equation.

Additional fund needed:

Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company.

However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Expert Solution & Answer

Answer to Problem 1Q

Key factors on which external financing depend are as follows:

Payout ratio:

Payout ratio is the fraction of dividend and net income. It is the amount of dividend that has to be paid to the shareholders out of the net income of the year.

Sales growth rate:

Sales growth rate means the growth rate in which the sales of a company grow per year.

Capital intensity ratio:

Capital intensity ratio is the ratio that helps to find the amount of capital a company needed to invest in its assets so that company has enough assets to meet its sales target. It helps to find out the amount of capital a company can invest into its assets.

Profit margin:

Profit margin is the excess of total sales revenue over the total cost. Profit margin is the difference between net sales and cost.

Days sales outstanding:

Days sales outstanding means the number of days a company needed to pay off to its suppliers.

Explanation of Solution

The payout ratio is a key factor of additional fund needed to know whether the company has enough net income to pay off the dividends to its shareholders. It helps to know the company’s profitability and company’s ability to pay off the dividends to its shareholders.
Every company’s main motive is to earn maximum profit. A company cannot survive without earning a profit. The profit margin is a key factor of additional fund needed because the company needs additional funding to increase its operations, which results in profit margin.
Sales growth rate is a key factor of external financing because the company needs additional funding to increase its assets so that company can increase its sales and expand its operations.
Capital intensity ratio is a key factor of additional needed fund so that the company can determine the amount of additional capital a company needed to invest into its assets.
Day’s sales outstanding are a key factor of external funds because it helps a company to determine the number of days available with a company to pay off to its suppliers.

Conclusion

External financing depends on payout ratio, sales growth rate, capital intensity ratio, profit margin, and days sales outstanding.

Answer 6

Chapter 17, Problem 1Q

Summary Introduction

To explain: Key factors on which external financing depends, as indicated in additional fund needed equation.

Additional fund needed:

Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company.

However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Expert Solution & Answer

Answer to Problem 1Q

Key factors on which external financing depend are as follows:

Payout ratio:

Payout ratio is the fraction of dividend and net income. It is the amount of dividend that has to be paid to the shareholders out of the net income of the year.

Sales growth rate:

Sales growth rate means the growth rate in which the sales of a company grow per year.

Capital intensity ratio:

Capital intensity ratio is the ratio that helps to find the amount of capital a company needed to invest in its assets so that company has enough assets to meet its sales target. It helps to find out the amount of capital a company can invest into its assets.

Profit margin:

Profit margin is the excess of total sales revenue over the total cost. Profit margin is the difference between net sales and cost.

Days sales outstanding:

Days sales outstanding means the number of days a company needed to pay off to its suppliers.

Explanation of Solution

The payout ratio is a key factor of additional fund needed to know whether the company has enough net income to pay off the dividends to its shareholders. It helps to know the company’s profitability and company’s ability to pay off the dividends to its shareholders.
Every company’s main motive is to earn maximum profit. A company cannot survive without earning a profit. The profit margin is a key factor of additional fund needed because the company needs additional funding to increase its operations, which results in profit margin.
Sales growth rate is a key factor of external financing because the company needs additional funding to increase its assets so that company can increase its sales and expand its operations.
Capital intensity ratio is a key factor of additional needed fund so that the company can determine the amount of additional capital a company needed to invest into its assets.
Day’s sales outstanding are a key factor of external funds because it helps a company to determine the number of days available with a company to pay off to its suppliers.

Conclusion

External financing depends on payout ratio, sales growth rate, capital intensity ratio, profit margin, and days sales outstanding.

Answer 7

Chapter 17, Problem 1Q

Summary Introduction

To explain: Key factors on which external financing depends, as indicated in additional fund needed equation.

Additional fund needed:

Additional fund needed is also known as external financing needed. It is the state in which a company needed finance to increase its operation. Additional fund needed is a method in which companies raise the funds through external resources to increase its assets, which would increase the sales revenue of a company.

However, according to additional fund needed method, a company does not change its financial ratio. Liabilities and retained earnings spontaneously increase with the increase in sales and assets.

Answer 8

Expert Solution & Answer

Answer to Problem 1Q

Key factors on which external financing depend are as follows:

Payout ratio:

Payout ratio is the fraction of dividend and net income. It is the amount of dividend that has to be paid to the shareholders out of the net income of the year.

Sales growth rate:

Sales growth rate means the growth rate in which the sales of a company grow per year.

Capital intensity ratio:

Capital intensity ratio is the ratio that helps to find the amount of capital a company needed to invest in its assets so that company has enough assets to meet its sales target. It helps to find out the amount of capital a company can invest into its assets.

Profit margin:

Profit margin is the excess of total sales revenue over the total cost. Profit margin is the difference between net sales and cost.

Days sales outstanding:

Days sales outstanding means the number of days a company needed to pay off to its suppliers.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The payout ratio is a key factor of additional fund needed to know whether the company has enough net income to pay off the dividends to its shareholders. It helps to know the company’s profitability and company’s ability to pay off the dividends to its shareholders.
Every company’s main motive is to earn maximum profit. A company cannot survive without earning a profit. The profit margin is a key factor of additional fund needed because the company needs additional funding to increase its operations, which results in profit margin.
Sales growth rate is a key factor of external financing because the company needs additional funding to increase its assets so that company can increase its sales and expand its operations.
Capital intensity ratio is a key factor of additional needed fund so that the company can determine the amount of additional capital a company needed to invest into its assets.
Day’s sales outstanding are a key factor of external funds because it helps a company to determine the number of days available with a company to pay off to its suppliers.

Answer 12

Conclusion

External financing depends on payout ratio, sales growth rate, capital intensity ratio, profit margin, and days sales outstanding.

Answer 13

Ch. 17 - Prob. 1Q Ch. 17 - Assume that an average firm in the office supply...Ch. 17 - Would you agree that computerized corporate...Ch. 17 - Certain liability and net worth items generally...Ch. 17 - Suppose a firm makes the following policy changes....Ch. 17 - AFN EQUATION Carlsbad Corporation's sales are...Ch. 17 - AFN EQUATION Refer to problem 17-1. What...Ch. 17 - AFN EQUATION Refer to problem 17-1 and assume that...Ch. 17 - PRO FORMA INCOME STATEMENT Austin Grocers recently...Ch. 17 - EXCESS CAPACITY Williamson Industries has 7...

Answer to Problem 1Q

Explanation of Solution

Want to see more full solutions like this?

Chapter 17 Solutions