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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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