Question
Consider the following information for the percentage of sales approach: Sales = $3M, NI = $0.6M , Retention ratio = 0.75 Total Asset = $4M
Consider the following information for the percentage of sales approach:
Sales = $3M, NI = $0.6M, Retention ratio = 0.75 Total Asset = $4M Current Liability $0.2M Long-term debt = $1M Equity = $2.8M
If sales increase by 25% (and NI, assets, and CL increase at the same rate), calculate the external financing needed.
Group of answer choices
0.890
0.220
0.723
0.388
0.555
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Financial Management For Farmers And Rural Managers
Authors: Martyn Warren
4th Edition
0632048719, 9780632048717
