Alter Inc. plans to grow sales at a 10% annual rate for 2016. Interest expense in 2016
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Question:
Alter Inc. plans to grow sales at a 10% annual rate for 2016. Interest expense in 2016 is expected to remain at $3,000. Assuming that income statement and balance sheet relationships to sales are unchanged and that the tax rate is 20%.
Alter, Inc. 2015
Sales$150,000
Assets$145,000
COGS$120,000
EBIT$30,000
Interest$3,000
EBT$27,000
Tax$5,400
Net income$21,600
Dividends$10,800
Current liabilities$5,000
Total long-term debt$60,000
Total equity$80,000
Total liabilities & equity$145,000
What is external funding need for 2016?
Expert Answer:
To calculate the external funding needed for 2016 we need to determine the increase in assets result... View the full answer
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