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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
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 an 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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