Question
In: Finance
Assume sales for Peach Street Industries are expected to increase by 8.00% from 2015 to 2016....
Assume sales for Peach Street Industries are expected to increase by 8.00% from 2015 to 2016. Peach Street is operating at full capacity currently and expected assets-to-sales and spontaneous liabilities-to-sales to remain the same. Additionally, the firm is looking to maintain their 2015 net profit margin and dividend payout ratios for 2016. The firm’s tax rate is 35.00% and selected income statement and balance sheet information for 2015 is provided below:
| Entry | Value | Entry | Value |
|---|---|---|---|
| Current Assets | $800.00 | Sales | $2,500.00 |
| Net Fixed Assets (NFA) | $700.00 | Operating Costs | $2,030.00 |
| Total Assets | $1,500.00 | Depreciation | $90.00 |
| Accounts Payable and Accruals | $30.00 | Interest Expense | $69.00 |
| Notes Payable | $180.00 | Dividends Paid | $93.30 |
| Long term debt | $510.00 | ||
| Total Equity | $780.00 |
How much in additional funds (external capital) will Peach Street Industries need in 2016 to support their projected growth in sales? (i.e., calculate the firm’s additional funds needed --AFN) ?
Solutions
Expert Solution
I HAVE CALCULATED "AFN" USING EQUATION AS NOTHING WAS
MENTIONED
jeff jeffy answered 10 months agoRelated Solutions
Assume sales for Peach Street Industries are expected to increase by 8.00% from 2015 to 2016....
Assume sales for Peach Street Industries are expected to
increase by 8.00% from 2015 to 2016. Peach Street is operating at
full capacity currently and expected assets-to-sales and
spontaneous liabilities-to-sales to remain the same. Additionally,
the firm is looking to maintain their 2015 net profit margin and
dividend payout ratios for 2016. The firm’s tax rate is 38.00% and
selected income statement and balance sheet information for 2015 is
provided below:
Entry
Value
Entry
Value
Current Assets
$800.00
Sales
$2,500.00...
Assume sales for Peach Street Industries are expected to increase by 8.00% from 2015 to 2016....
Assume sales for Peach Street Industries are expected to
increase by 8.00% from 2015 to 2016. Peach Street is operating at
full capacity currently and expected assets-to-sales and
spontaneous liabilities-to-sales to remain the same. Additionally,
the firm is looking to maintain their 2015 net profit margin and
dividend payout ratios for 2016. The firm’s tax rate is 37.00% and
selected income statement and balance sheet information for 2015 is
provided below:
Entry
Value
Entry
Value
Current Assets
$800.00
Sales
$2,500.00...
Assume sales for Peach Street Industries are expected to increase by 7.00% from 2015 to 2016....
Assume sales for Peach Street Industries are expected to
increase by 7.00% from 2015 to 2016. Peach Street is operating at
full capacity currently and expected assets-to-sales and
spontaneous liabilities-to-sales to remain the same. Additionally,
the firm is looking to maintain their 2015 net profit margin and
dividend payout ratios for 2016. The firm’s tax rate is 36.00% and
selected income statement and balance sheet information for 2015 is
provided below:
Entry
Value
Entry
Value
Current Assets
$800.00
Sales
$2,500.00...
Assume sales for Peach Street Industries are expected to increase by 9.00% from 2015 to 2016....
Assume sales for Peach Street Industries are expected to
increase by 9.00% from 2015 to 2016. Peach Street is operating at
full capacity currently and expected assets-to-sales and
spontaneous liabilities-to-sales to remain the same. Additionally,
the firm is looking to maintain their 2015 net profit margin and
dividend payout ratios for 2016. The firm’s tax rate is 37.00% and
selected income statement and balance sheet information for 2015 is
provided below: Entry Value Entry Value Current Assets $800.00
Sales $2,500.00...
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