1. Your company has sales of $100,000 this year and cost of goods sold of $72,000. You forecast sales to increase to $110,000 next year. Using the percent of sales method, forecast next year's cost of goods sold. 2. For the next fiscal year, you forecast net income of $50,000 and ending assets of $500,000. Your firm's payout ratio is 10%. Your beginning stockholders' equity is $300,000 and your beginning total liabilities are $120,000. Your non-debt liabilities such as accounts payable are forecasted to increase by $10,000. What is your net new financing needed for next year? 3. Assume your beginning debt in Problem 2 is $100,000. What amount of equity and what amount of debt would you need to issue to cover the net new financing in order to keep your debt-equity ratio constant?

1. You have just landed in London with $500 in your wallet. Stopping at the foreign exchange booth, you see that pounds are being quoted at $1.95/. For how many pounds can you exchange your $500? 2. Your firm needs to pay its French supplier 500,000. If the exchange rate is 0.65/$, how many dollars will you need to make the exchange?