Question
4-1.Sambonoza Enterprises projects its sales next year to be $4 million and expects toearn 5 percent of that amount after taxes. The firm is currently
4-1.Sambonoza Enterprises projects its sales next year to be $4 million and expects toearn 5 percent of that amount after taxes. The firm is currently in the process ofprojecting its financing needs and has made the following assumptions (projections):Current assets will equal 20 percent of sales while fixed assets will remain at theircurrent level of $1 million.Common equity is currently 0.8 million and the firm pays out half its after-taxearnings in dividends.The firm has short term payables and trade credit that normally equal 10 percentof sales and has no long-term debt outstanding.What are Sambonozas financing needs for the coming year?
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