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Galehouse Gas Stations Inc. expects sales to increase from $1,680,000 to $1,880,000 next year. Galehouse believes that net assets (Assets Liabilities) will represent 60
Galehouse Gas Stations Inc. expects sales to increase from $1,680,000 to $1,880,000 next year. Galehouse believes that net assets (Assets Liabilities) will represent 60 percent of sales. His firm has an 10 percent return on sales and pays 30 percent of profits out as dividends. a. What effect will this growth have on funds? The cash balance will increase by $ 120,000 b. If the dividend payout is only 10 percent, what effect will this growth have on funds? The cash balance will decrease by $ 11,600
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