Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Galehouse Gas Stations Incorporated expects sales to increase from $1,750,000 to $1,950,000 next year. Galehouse believes that net assets (Assets - Liabilities) will represent 80

Galehouse Gas Stations Incorporated expects sales to increase from $1,750,000 to $1,950,000 next year. Galehouse believes that net assets (Assets - Liabilities) will represent 80 percent of sales. Her firm has an 12 percent return on sales and pays 40 percent of profits out as dividends. a. What effect will this growth have on funds? The cash balance will decrease by The cash balance will b. If the dividend payout is only 20 percent, what effect will this growth have on funds?
image text in transcribed
Galehouse Gas Stations incorporated expects sales to increase from $1,750,000 to $1,950,000 next year. Galehouse believes that net assets (Assets - Liabilities) will represent 80 percent of sales. Her firm has an 12 percent return on sales and pays 40 percent of profits out as dividends: a. What effect will this growth have on funds? b. If the dividend poyout is only 20 percent, what effect will this growth have on funds

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting concepts and applications

Authors: Albrecht Stice, Stice Swain

11th Edition

978-0538750196, 538745487, 538750197, 978-0538745482

More Books

Students also viewed these Accounting questions

Question

What is your greatest weakness?

Answered: 1 week ago

Question

When is it appropriate to show grace toward others?

Answered: 1 week ago