Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use these financial statements to answ a. LPC has decided to launch its aggressive growth program. Projected sales growth in 2022 is expected to

image text in transcribedimage text in transcribed

Use these financial statements to answ a. LPC has decided to launch its aggressive growth program. Projected sales growth in 2022 is expected to be 40%. Assuming a constant percentage of sales, complete the Lunar Powered Corporation 2022(a) income statement and balance sheet below in the columns provided. Financial statement accounts will grow by 40% also, with the following exceptions. Assume that interest expense will increase 40% to $28,and that dividends will be 21. Also, assume that LPC is at full capacity and that this will require a 40% increase in gross fixed assets and deprecation. And, assume excess cash will decline to 0. Finally, assume that LPC will issue more Long-term debt to cover its need for additional funding. How much additional funding is needed in 2022(a)? Only enter the highlighted numbers below. Lunar Powered Corporation Income Statement ($ in millions) 2021 2022(a) 2022(b) Sales Cost of Goods 1000 1400 1400 Note: -700 0 0 2022 anticipated sales growth Gross Profit 300 1400 1400 Cost of goods Sold in 2021 is 700/1000 = Sell, Gen, Admin Expenses -130 0 0 EBITDA 170 1400 1400 Depreciation -50 EBIT 120 1400 1400 Interest -201 -28 -28 EBT 100 1372 1372 Taxes Net income Dividends 40% 40 -548.8 548.8 60 823.2 823.2 20 21 21 Addition to Retained Eamings 40 802.2 8022 40.00% 70.00%

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_2

Step: 3

blur-text-image_3

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

Financial Reporting Financial Statement Analysis and Valuation

Authors: Clyde P. Stickney

6th edition

324302959, 978-0324302967, 324302967, 978-0324302950

More Books

Students also viewed these Accounting questions

Question

=+b) What were the factors and factor levels?

Answered: 1 week ago