The following condensed balance sheet is for Bach Company for the current fiscal year. The current...

The following condensed balance sheet is for Bach Company for the current fiscal year. The current year sales total $600,000 and net income is $30,000. Bach’s dividend payout ratio is 40%.
Cash $50,000 A/Payable $75,000
A/Receivable 80,000 Accruals 10,000
Inventories 60,000 Notes Payable 25,000
Total Current Assets $190,000 Total Current Liabilities $110,000
Fixed assets, net 110,000 Long-term Debt 50,000
Common Stock 80,000
Retained Earnings 60,000
Total Assets $300,000 Total Liab. & Equity $300,000
For the coming fiscal year, the company expects sales growth of 20%.
Assuming the company is operating at full capacity and hence increase in sales results in increase in all assets, calculate the external funds need (EFN) for the coming year
a. -$600
b. $16,400
c. $21,400
d. $23,400
problem above. Assume the firm has unused capacity. So only current assets change spontaneously with changes in sales. What will be the external funds needed (EFN) with this assumption?
a. -$600
b. $16,400
c. $21,400
d. $23,400

problem above Assume Bach has unused capacity. It wants to change its dividend payout ratio such that its EFN will be zero. What should be its dividend payout ratio?
a. 20%
b. 32%
c. 52%
d. 42%

Same question,in parts

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jeff jeffy answered 1 year ago

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