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In: Finance
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 2 years agoRelated Solutions
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