Question
Galehouse Gas Stations Inc. expects sales to increase from $1,710,000 to $1,910,000 next year. Mr. Galehouse believes that net assets (Assets Liabilities) will represent 45
Galehouse Gas Stations Inc. expects sales to increase from $1,710,000 to $1,910,000 next year. Mr. Galehouse believes that net assets (Assets Liabilities) will represent 45 percent of sales. His firm has a 8 percent return on sales and pays 20 percent of profits out as dividends. (Input all amounts as positive values.)
a. What effect will this growth have on funds?
The cash balance will increase or decrease by $____
b. If the dividend payout is only 15 percent, what effect will this growth have on funds?
The cash balance will increase or decrease by $___.
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