Question
Consider the following information for the percentage of sales approach: Sales = $3M, NI = $0.4M , Retention ratio = 0.75 Total Asset = $4M
Consider the following information for the percentage of sales approach:
Sales = $3M, NI = $0.4M, Retention ratio = 0.75 Total Asset = $4M Current Liability $0.2M Long-term debt = $1M Equity = $2.8M
If sales increase by 20% (and NI, assets, and CL increase at the same rate), calculate the external financing needed.
Group of answer choices
0.575
0.925
0.400
0.750
1.100
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Financial Management Principles And Practice
Authors: Timothy Gallagher
7th Edition
0996095462, 978-0996095464
