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Muscat Video Products' sales are expected to increase from OMR (8) million in 2019 to OMR...

Muscat Video Products' sales are expected to increase from OMR (8) million in 2019 to OMR (10)
million in 2020. Asset turnover generated in the 2019 of (2) times. Muscat Company is already at full
capacity, so its assets must grow at the same rate as projected sales .
At the end of 2019, current liabilities were OMR (2) million, the net profit was OMR (32) thousand,
and the dividend payout ratio was 30%. Suppose the net profit margin and dividend payout ratio will
hold the same percentage in 2020.
Is Muscat company needs fund from external or internal to finance the new sales in 2020? And
why. (Note: - Kindly mention the equations that are related)
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Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

EXTERNAL FINANCING IS REQUIRED AS AFN IS POSITIVE VALUE

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