Question

Emerson Company has total assets of $1,575,000, long-term debt of $630,000, stockholders' equity of $819,000, and current liabilities of $126,000. The dividend payout ratio is 35 percent and the profit margin is 10 percent. Assume all assets and current liabilities change spontaneously with sales and the firm is currently operating at full capacity. What is the external financing need if the current sales of $2,100,000 are projected to increase by 15 percent?

Answer #1

Red Hat has total assets of $620,000, long-term debt of
$236,000, stockholders' equity of $185,000, and current liabilities
of $199,000. The dividend payout ratio is 34 percent and the profit
margin is 9 percent. Assume all assets and current liabilities
change spontaneously with sales and the firm is currently operating
at full capacity. What is the external financing need if the
current sales of $840,000 are projected to increase by 15
percent?
$5,612.30
$5,769.60
$5,835.90
$5,904.20
$6,011.50

Suppose Mariposa, Inc.’s Sales are projected to grow by 20% next
year. It has total assets that grow proportionately with sales.
Current total assets are $2 million and current total sales are $1
million. The only liabilities that change with sales are accounts
payable, which are currently $300,000. The profit margin and
dividend payout ratio are constant. The profit margin is 15 percent
and the dividend payout ratio is 60 percent. Using the “percent of
sales” approach, answer the following...

Green Lumber has total sales of $387,200 on total assets of
$429,600, current liabilities of $45,000, and $24,000 of dividends
paid on net income of $57,700. Assume that all costs, assets, and
current liabilities change spontaneously with sales. The tax rate
and dividend payout ratios remain constant. If the firm's managers
project a firm growth rate of 12 percent for next year, what will
be the amount of external financing needed (EFN) to support this
level of growth? Assume the...

Urban’s, which is currently not operating at full capacity, has
sales of $47,000, current assets of $5,100, current liabilities of
$6,200, net fixed assets of $51,500, and a 5 percent profit margin.
The firm has no long-term debt and does not plan on acquiring any.
No new equity will be issued. The firm does not pay any dividends.
Sales are expected to increase by 3 percent next year. The
following items vary directly with sales – current assets and
short-term...

Ratios and Fixed Assets [L{)2] The Maurer company has a
long-term debt ratio of .35 and a current ratio of 1.30. Current
liabilities are $955, sales 'are $7,210, profit margin is 8.3
percent, and RoE is 17.5 percent. what is the amount of the firm's
net fixed assets?

Revenues
$4,200
Current assets
$4,500
Current liabilities
$970
Costs
2,800
Fixed assets
5,300
Long-term debt
3,500
Taxable income
$1,400
Equity
5,330
Taxes (23%)
322
Total
$9,800
Total
$9,800
Net income
$1,078
Assets, costs, and current liabilities vary directly with
revenues. Long-term debt and equity do not. The firm maintains a
constant 40 percent dividend payout rate. Revenues for the next
year are projected to increase by 25 percent.
What is the external financing needed for the next
year?
Multiple Choice...

1) Southern Mfg., Inc., is currently operating at only 94
percent of fixed asset capacity. Current sales are $500,000. Fixed
assets are $400,000 and sales are projected to grow to $740,000.
How much in new fixed assets are required to support this growth in
sales? Assume the company wants to operate at full capacity.
New fix asset?
2) Southern Mfg., Inc., is currently operating at only 90
percent of fixed asset capacity. Current sales are $560,000. How
fast can sales...

Urban’s, which is currently not operating at full capacity, has
sales of $47,000, current assets of $5,100, current liabilities of
$6,200, net fixed assets of $51,500, and a 5 percent profit margin.
The firm has no long-term debt and does not plan on acquiring any.
No new equity will be issued. The firm does not pay any dividends.
Sales are expected to increase by 3 percent next year. The
following items vary directly with sales – current assets and
short-term...

Wagner Industrial Motors, which is currently operating at full
capacity, has sales of $2,400, current assets of $740, current
liabilities of $430, net fixed assets of $1,590, and a 5 percent
profit margin. The firm has no long-term debt and does not plan on
acquiring any. The firm does not pay any dividends. Sales are
expected to increase by 10 percent next year. If all assets,
short-term liabilities, and costs vary directly with sales, how
much external equity financing is...

The Smathers Company has a long-term debt ratio (i.e., the ratio
of long-term debt to long-term debt plus equity) of .53 and a
current ratio of 1.42. Current liabilities are $2,470, sales are
$10,690, profit margin is 10 percent, and ROE is 15 percent.
What is the amount of the firm’s net fixed assets?
(Do not round intermediate calculations
and round your answer to 2 decimal places, e.g.,
32.16.)
Net fixed assets
$

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