Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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? b. If the dividend payout is only 10 percent, what effect will this growth have on funds?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a To determine the effect of the sales growth on funds we first calculate the expected increase in n...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started