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help will like if right Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet: When a firm grows, some liabilities orow spontaneously along
help will like if right
Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet: When a firm grows, some liabilities orow spontaneously along with sales. Spontaneous liabilities are a source of capital that the firm will generate. internaty, so they roduce the need for external capital. How much of the total increase in assets will be supphed by spontaneous iabilities for Green Caterpillar Garden Supplies, inc. this yeor? (Note: Do not round intermediate calculations.) $72,000 $61,200 $82,800 $57,500 In addition, Green Caterpillar. Garden Supplies Inc. is expected to generate net incorne this year. The firm will pay out sorne of its earnings as dividends but will retain the rest for future asset investment. Noain, the more a firm gentrotes internally from ifs operations, the fess it will haw to rase extertally from the capital markets. Aswume that the firmis profit margin and dividend poyout rotio ise expected to remain constant Given the preceding information, Green Caterpiliar Carden Supplies Inc: is expected to generate $ from operations that will be added to fetained earnings. (Note: Do not round intermediate calculations.) According to the AfN equation and projections for Green Caterpillar Garden Supplies Inc, the finin's AFN is $ (Notei Do not round intermedete calculations.) The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year, In the year that just ended, Green Caterpillar: Garden Supplies Ine: generated $500,000 riet income on sites of $14,000,000, The firm expects sales to increose by 18% this coming year and also expects to maintain its long-run dividend payout ratio of 45%. Suppose Green Caterpillar Garden Supplies Incis assets are fully utilized, Use the additional funds needed (AFN) equation to determine the increase i total assets that is necessairy to support Green Caterpillar Garden Supplies inc's expected sales. (Note: Do not round intermediate calculations.) $621,000 30132,000 $540,000 $459,000 Step by Step Solution
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