2) The net income is RO 25,000. Last year's sales were RO 180,000. The total assets represent half (50%) of total sales. The accounts payables represent 10% of total assets. The accruals is RO 2,000 and the notes payables is RO 3,000. The assets and costs vary directly with sales. The firm distributes RO 15,000 dividends. The firm operates at full capacity. If the sales growth rate is 15%, how much external financing is needed? Interpret.

2) The net income is RO 25,000. Last year's sales were RO 180,000. The total assets represent half (50%) of total sales. The accounts payables represent 10% of total assets. The accruals is RO 2,000 and the notes payables is RO 3,000. The assets and costs vary directly with sales. The firm distributes RO 15,000 dividends. The firm operates at full capacity. If the sales growth rate is 15%, how much external financing is needed? Interpret.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 10P

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