During 2018, Raines Umbrella Corp. had sales of $750,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $540,000, $85,000, and $190,000, respectively. In addition, the company had an interest expense of $65,000 and a tax rate of 21 percent. (ignore any tax loss carryforward provisions and assume interest expense is fully deductible.) Suppose the company paid out $68,000 in cash dividends. If spending on net fixed assets and n capital was zero, and if no new stock was issued during the year, what is the net new long-term debt? (Do not round intermediate calculations.) Net new long-term debt 8,000

Question
During
2018,
Raines
Umbrella
Corp.
had
sales of $750,000. Cost of goods sold, administrative and selling
expenses, and depreciation expenses were $540,000, $85,000, and $190,000, respectively. In addition, the
company had an interest expense of $65,000 and a tax rate of 21 percent. (ignore any tax loss carryforward
provisions and assume interest expense is fully deductible.)
Suppose the company paid out $68,000 in cash dividends. If spending on net fixed assets and n
capital was zero, and if no new stock was issued during the year, what is the net new long-term debt? (Do
not round intermediate calculations.)
Net new long-term debt
8,000
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Transcribed Image Text

During 2018, Raines Umbrella Corp. had sales of $750,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $540,000, $85,000, and $190,000, respectively. In addition, the company had an interest expense of $65,000 and a tax rate of 21 percent. (ignore any tax loss carryforward provisions and assume interest expense is fully deductible.) Suppose the company paid out $68,000 in cash dividends. If spending on net fixed assets and n capital was zero, and if no new stock was issued during the year, what is the net new long-term debt? (Do not round intermediate calculations.) Net new long-term debt 8,000

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