nbay Corporation is interested in estimating its additional financing needed to support a growth in sales next year. Last year, revenues were RM1million; net profit margin was 6 percent; investment in assets was RM750,000; payables and accruals were RM100,000; stockholders’ equity at the end of the year was RM450,000. The venture did not pay out any dividends and does not expect to pay dividends for the future. (a) Elaborate the concept of sustainable sales growth rates in relation to the additional fund needed (AFN) (b) Calculate the additional fund needed (AFN) next year to support a 30 percent increa
nbay Corporation is interested in estimating its additional financing needed to support a growth in sales next year. Last year, revenues were RM1million; net profit margin was 6 percent; investment in assets was RM750,000; payables and accruals were RM100,000; stockholders’ equity at the end of the year was RM450,000. The venture did not pay out any dividends and does not expect to pay dividends for the future. (a) Elaborate the concept of sustainable sales growth rates in relation to the additional fund needed (AFN) (b) Calculate the additional fund needed (AFN) next year to support a 30 percent increa
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 22P
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Wanbay Corporation is interested in estimating its additional financing needed to support a growth in sales next year. Last year, revenues were RM1million; net profit margin was 6 percent; investment in assets was RM750,000; payables and accruals were RM100,000; stockholders’ equity at the end of the year was RM450,000. The venture did not pay out any dividends and does not expect to pay dividends for the future.
(a) Elaborate the concept of sustainable sales growth rates in relation to the additional fund needed (AFN)
(b) Calculate the additional fund needed (AFN) next year to support a 30 percent increase in sales.
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