Question

3. The most recent financial statements for Shiver Me Timbers Corporation are below. Assume no income...

3. The most recent financial statements for Shiver Me Timbers Corporation are below.
Assume no income taxes. Round dollar amounts to the nearest whole dollar.


Income Statement
Sales $7,100

Costs $4,370

Net Income $2,730

------------------------

Balance Sheet

Assets $21,900

Total $21,900

Debt $9,400

Equity $12,500

Total $21,900


Here, assets and costs are proportional to sale, while debt and equity are not. The firm pays no dividends. Analysts project next year’s sales to be $8,449. What is the external financing needed?

4. The most recent financial statements for We Can Locate Anyone Anywhere Corporation are below.
Round dollar amounts to the nearest whole dollar.

Income Statement

Sales 26,400

Costs $17,300

Taxable Income $9,100

Taxes @40% $3,640

Net Income $5,460

Balance Sheet

Assets $65,000

Total $65,000

Debt $27,400

Equity $37,600

Total $65,000

Assets and costs are proportional to sales. Debt and equity are not. The firm paid a dividend of $2,300, and the company wishes to maintain a constant payout ratio. Analysts project next year’s sales to be $30,360. What is the external financing needed?

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