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Please help me solve this question !!!!! I need someone who knows how to get it right !!! The 2015nancial statements for Growth Industries are
Please help me solve this question !!!!! I need someone who knows how to get it right !!!
The 2015nancial statements for Growth Industries are presented below: INCOME STATEMENT. 2015 Sales $ 340,000 Costs 220,000 EBIT $ 120,000 Interest expense 24,000 Taxable income $ 96,000 Taxes (at 35%) 33,500 Net income $ 02,400 Dividends 5 18,720 Addition to retained earnings 43 ,630 BALANCE SHEET, YEAR-END, 2015 Assets Liabilities Current assets Current liabilities Cash $ 3,000 Accounts payable $ 10,000 Accounts receivable 8,000 Total current liabilities $ 10,000 Inventories 29,000 Long-term debt 240,000 Total current assets 5 40,000 Stockholders' equity Net plant and equipment 230,000 Common stock plus additional paid-in capital 15,000 Retained earnings 55,000 Total assets $320,000 Total liabilities and stockholders' eqtu $320,000 Sales and costs in 2010 are projected to be 40% higher than in 2015. Both current assets and accounts payable are projected to rise in proportion to sales. The xed assets of 8mm Industries are operating at only T094: of capacity. Interest expense in 2016 will equal 10% oflongterrn debt outstanding at the start at the year. The rm will maintain a dividend payout ratio of .30. What is the required extemal nancing over the nextyear? Eveni'iaeiesincreasebydhennallhesmoreianenoughxedessetstemeetpmduon. Onlyworking upitalwitiinaeeee.Networln'ngcepitaief1ennin2015 mass .The inoreesein ndmdngcwitwillbes ,whiehislesathantheincreeseintt'ieretained eemings. This required exiem fnanoing is $ . A negative external nancing vehe indicatesmennwillgenerah rnoreceahthaniineedstenmcetheproiededgrowm. Thiseattreceah can be used to reducedeli. repurchase shares. inaeeseceah reserves. orfund fuluregrowlt'l. This ewrtraceahwaspmanlychetomerrn'sexceaspmduoncapecityStep by Step Solution
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