Sales increase Pierce Furnishings generated $2 million in sales during 2015, and it's year-end total assets were $1.5 million. Also, at year-end 2015, current liabilities were $500, 000 consisting of $ 200, 000 of notes payable, and $ 200, 000 of accounts payable and $100, 000 of accrued liabilities. Looking ahead to 2016, the company estimates that it's assets must increase by $ 0.75 for every $ 1.00 increase in sales. Pierce's profit margin is 5%, and it's retention ratio is 40%. Hoelw large of a sales increase can the company achieve without having to raise funds externally.
Sales increase Pierce Furnishings generated $2 million in sales during 2015, and it's year-end total assets were $1.5 million. Also, at year-end 2015, current liabilities were $500, 000 consisting of $ 200, 000 of notes payable, and $ 200, 000 of accounts payable and $100, 000 of accrued liabilities. Looking ahead to 2016, the company estimates that it's assets must increase by $ 0.75 for every $ 1.00 increase in sales. Pierce's profit margin is 5%, and it's retention ratio is 40%. Hoelw large of a sales increase can the company achieve without having to raise funds externally.
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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Sales increase Pierce Furnishings generated $2 million in sales during 2015, and it's year-end total assets were $1.5 million. Also, at year-end 2015, current liabilities were $500, 000 consisting of $ 200, 000 of notes payable, and $ 200, 000 of accounts payable and $100, 000 of accrued liabilities. Looking ahead to 2016, the company estimates that it's assets must increase by $ 0.75 for every $ 1.00 increase in sales. Pierce's profit margin is 5%, and it's retention ratio is 40%. Hoelw large of a sales increase can the company achieve without having to raise funds externally.
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