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Suppose that current assets, costs, and accounts payable maintain a constant ratio to sales.

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Balance Sheet;Cash;Inventory;Fixed assets;$ 50;$150;$600;Total assets;$800;Sales;Costs;EBT;Taxes (34%);Net income;Accounts payable;Notes payable;Long-term debt;Equity;Total liabilities & equity;$100;100;350;250;$800;Income statement;$800;600;$200;68;$132;Suppose that current assets, costs, and accounts payable maintain a constant ratio to sales. The firm retains 40% of;earnings. If the firm is producing at full capacity, what is the total external financing needed if sales;increase 25%, assuming fixed assets increase proportionately with sales (4 marks)?

 

Paper#32775 | Written in 18-Jul-2015

Price : $27
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