16,17,18

XYZ recently reported sales of $100 million, and net income eual to $5 million. The company has $70 million. The company has $70 million in total assets. Over the next year, the company is forecasting a 20 percent increase in sales. Since the company is at full capacity, its assets must increase in proportion to sales. The company also ostimates that if sales increase 20 percent, spontaneous liabilities will increase by $2 million. If the company's sales increase, its profit margin will remain at its current level. The company's dividend payout ratio is 40 percent. Based on the AFN formula, how much additional capital must the company raise in order to support the 20 percent increase in sales? $2.0 million $6.0 million $8.4 million $9.6 million XYZ believes that its sales next year will increase 20 percent from the current level of $800000. Management calculates that assets must increase $110000 to support the new sales level, and current liabilities will increase $70000. What total financing will be needed? $40000 $1600 $33600 $8000 A firm has the following balance sheet: Sales for the year just ended were $400, and fixed assets were used at 80 percent of capacity, but its current assents were at optimal level. Sales are expected to grow by 5 percent next year, the profit margin is 5 percent, and the dividend payout ratio is 60 percent. How much additional funds (AFN) will be needed? $4.6 -$6.4(surplus) $2.4 -$4.6(surplus) $0.8 Which of the following statements is most correct? Other things held constant, the higher a firm's days sales outstanding (DSO), the better its credit department. If a firm that sells on terms of net 30 changes its policy and begins offering all customers terms of 2/10, net 30 days, and if no change in sales volume occurs, then the firm's DSO will probably increase. If a firm sells on terms of 2/10, net 30 days, and its DSO is 30 days, then its aging schedule would probably show some past due accounts. Statements a and c are correct. None of the statements above is correct