Galehouse Gas Stations Inc. expects sales to increase from $1,550,000 to $1,750,000 next year. Mr. Galehouse believes

Question:

Galehouse Gas Stations Inc. expects sales to increase from $1,550,000 to $1,750,000 next year. Mr. Galehouse believes that net assets (Assets ( Liabilities) will represent 50 percent of sales. His firm has an 8 percent return on sales and pays 45 percent of profits out as dividends.
a. What effect will this growth have on funds?
b. If the payout is only 25 percent, what effect will this growth have on funds? Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...