CCC currently has sales of $23,000,000 and projects sales of $27,600,000 for next year. The firm's...

 

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CCC currently has sales of $23,000,000 and projects sales of $27,600,000 for next year. The firm's current assets equal $7,000,000 while its fixed assets are $5,000,000. The best estimate is that current assets will rise directly with sales while fixed assets will rise by $500,000. The firm presently has $3,500,000 in accounts payable, $2,500,000 in long-term debt, and $6,000,000 in common equity. All current liabilities are expected to change directly with sales. CCC plans to pay $900,000 in dividends next year and has a 4.0% net profit margin. What are the company's additional funds needed for the next year? CCC currently has sales of $23,000,000 and projects sales of $27,600,000 for next year. The firm's current assets equal $7,000,000 while its fixed assets are $5,000,000. The best estimate is that current assets will rise directly with sales while fixed assets will rise by $500,000. The firm presently has $3,500,000 in accounts payable, $2,500,000 in long-term debt, and $6,000,000 in common equity. All current liabilities are expected to change directly with sales. CCC plans to pay $900,000 in dividends next year and has a 4.0% net profit margin. What are the company's additional funds needed for the next year?

Answer rating: 100% (QA)

To calculate the additional funds needed for the next year we need to determine the change in assets ... View the full answer