The most recent financial statements for ABC, Inc., are shown here:

Income StatementBalance SheetSales$3,700Current assets$4,300Current liabilities$800Costs2,600

Fixed assets5,100Long-term debt3,660Taxable income$1,100Equity4,940Taxes (33%)363Total$9,400

Total$9,400

Net income$737

Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 50 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 30 percent.

What is the external financing needed?

rev: 09_17_2012

a) $2,050.95

b) $2,340.95

c) $1,098

d) $2,150.95

e) $2,100.95

The most recent financial statements for ABC, Inc., are shown here:

Income StatementBalance SheetSales$22,800Assets$112,000Debt$46,600Costs16,400

Equity65,400Taxable income$6,400Total$112,000

Total$112,000

Taxes (30%)1,920Net income$4,480

Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,590 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $27,700.

What is the external financing needed?

rev: 09_17_2012

a) $20,559

b) $14,784

c) $17,094

d) $168,925

e)$ 15,939

ABC, Inc., is currently operating at only 82 percent of fixed asset capacity. Fixed assets are $421,200. Current sales are $520,000 and projected to grow to $748,293.

How much in new fixed assets are required to support this growth in sales? Assume the company maintains its current operating capacity.

rev: 09_17_2012

a) $79,607

b) $184,917

c) $75,816

d) $78,849

e) $72,025