EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 4, Problem 10P
Summary Introduction
To determine: The amount of external financing required by Company ARI.
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Appalachian Registers, Inc. (ARI) has current sales of $50 million. Sales are expected to grow to $75 million next year. ARI currently has accounts receivable of $11 million, inventories of $15 million, and net fixed assets of $17 million. These assets are expected to grow at the same rate as sales over the next year. Accounts payable are expected to increase from their current level of $15 million to a new level of $20 million next year. ARI wants to increase its cash balance at the end of next year by $3 million over its current cash balances, which average $4 million. Earnings after taxes next year are forecasted to be $10 million. Next year, ARI plans to pay dividends of $1 million, up from $500,000 this year. ARI’s marginal tax rate is 34 percent.
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$ _____ million ?
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Chapter 4 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
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