1. How much long-term debt will the company have to issue next year?2. If the operations are not in full capacity, what will be your answer? Phoenix Inc.'s Balance sheet as of December 31, 2020 is as follows:Current AssetsP800,000Accounts Payable200,000Notes Payable200,000Long-term Liabilities350,000Fixed Assets300,000Equity350,0001,100,0001,000,000In 2020, the company reported sales of 3,000,000, net income of 60,000, and dividends of 10,000.Sales are projected to increase by 10% next year. Both profit Margin and the dividend pay-out ratiowill remain the same. Operations are at full capacity. Assume external fund will be raised throughissuances of long-term debt obligations or bonds.

Name: 1. How much long-term debt will the company have to issue next year?2.
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Description: 1. How much long-term debt will the company have to issue next year?2. If the operations are not in full capacity, what will be your answer? Phoenix Inc.'s Balance sheet as of December 31, 2020 is as follows:Current AssetsP800,000Accounts Payable200,

SOLUTION WORKING NOTE -1 CURRENT ASSETS (800000*1.1) 880000 ACCOUNTS PAYABLE (200000*1.1) 220000…

Business

Accounting

Phoenix Inc.'s Balance sheet as of December 31, 2020 is as follows: Current Assets 800,000 Accounts Payable 200,000 Notes Payable 200,000 Long-term Liabilities 350,000 Fixed Assets 300,000 Equity 350,000 1,100,000 1,000,000 2020, the company reported sales of 3,000,000, net income of 60,000, and dividends of 10,000. sales are projected to increase by 10% next year. Both profit Margin and the dividend pay-out ratio vill remain the same. Operations are at full capacity. Assume external fund will be raised through ssuances of long-term debt obligations or bonds.

Phoenix Inc.'s Balance sheet as of December 31, 2020 is as follows: Current Assets 800,000 Accounts Payable 200,000 Notes Payable 200,000 Long-term Liabilities 350,000 Fixed Assets 300,000 Equity 350,000 1,100,000 1,000,000 2020, the company reported sales of 3,000,000, net income of 60,000, and dividends of 10,000. sales are projected to increase by 10% next year. Both profit Margin and the dividend pay-out ratio vill remain the same. Operations are at full capacity. Assume external fund will be raised through ssuances of long-term debt obligations or bonds.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 19P

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