16. Total Assets in 2020 are predicted to be A) $32,357 B) $2,592 C) $33,975 D) $30,603 17. The equity for 2020 is expected to be A) $9,645 B) $10,778 C) $10,060 D) $10,812 18. An increase in the payout ratio will decrease the internal growth rate, other things equal. A) True B) False 19. Which of the following would DECREASE net cash flow from operating activities? A) An increase in accounts receivable B) An increase in long term debt C) An increase in accounts payable D) None of the above 20. The total book value of WTC's equity is $13 million, and book value per share is $26. The stock has a market-to-book ratio of 1.5, and the cost of equity is 15%. The firm's bonds have a face value of $9 million and sell at a price of 110% of face value. The yield to maturity on the bonds is 10%, and the firm's tax rate is 21%. What is the company's WACC? A) 14.26% B) 13.89% C) 9.25% Use the following financial statement information for the next two questions. The bank loan will be used to provide the external funds needed. Growth Rate 20% Interest Expense 265 Tax Rate Dividend 2018 2019 2020 Cash Accounts receivable Inventory Prepaids Net PP&E Gross PP&E Accum Dep Total Assets 540 8,640 10,098 360 1,926 3,366 (1,440) 21,564 396 11,250 12,546 612 2,160 3,888 (1,728) 26,964 Bank loan Accounts payable Misc, accruals Mortgage Equity Total Debt and Equity 4,986 6,300 1,008 864 8,406 21,564 6,120 10,422 612 828 8.982 26,964 54,450 68,220 44,640 56,628 9,810 11,592 Sales Cost of goods sold Gross Profit Operating expenses Selling expense Salaries General expenses Total EBITDA Depreciation EBIT Interest Earnings before tax Tax Net income 4,176 2,466 1,038 7,680 2,130 216 1,914 534 1,380 504 876 5,058 2,952 1,206 9,216 2,376 288 2.088 630 1,458 522 936 Free Cash Flows to Firm