Assume that all costs, assets, and accounts payable change spontaneously with sales. For simplicity’s sake, assume interest expense also changes spontaneously with sales (even though you know if may not). The tax rate and dividend payout ratios remain constant. If the firm’s managers project a firm growth rate of 15 percent for next year, what will be the amount of external financing needed to support this level of growth?

  

Group of answer choices

$49,535

$68,211

−$10,406

$13,909

$32,408

Transcribed Image Text:

Narrow Falls Lumber Balance Sheets as of December 31, 2014 and 2015 2015 2014 2015 2014 Cash $ 32,300 $ 26,900 Accounts payable $ 78,900 $ 79,200 Accounts receivable 74,700 72,300 Notes payable 50,000 40,000 Inventory 99,500 97,800 Long-term debt 295,600 354,500 Common stock and paid-in surplus Net fixed assets 707,100 705,000 ($1 par value) 170,000 175,000 Retained earnings 319,100 253,300 Total liabilities & Total assets $913,600 $902,000 owners' equity $913,600 $902,000 Narrow Falls Lumber Balance Sheets as of December 31, 2014 and 2015 2015 2014 2015 2014 Cash $ 32,300 $ 26,900 Accounts payable $ 78,900 $ 79,200 Accounts receivable 74,700 72,300 Notes payable 50,000 40,000 Inventory 99,500 97,800 Long-term debt 295,600 354,500 Common stock and paid-in surplus Net fixed assets 707,100 705,000 ($1 par value) 170,000 175,000 Retained earnings 319,100 253,300 Total liabilities & Total assets $913,600 $902,000 owners' equity $913,600 $902,000

Answer rating: 100% (QA)

Required solution External Financing Needed Increase ... View the full answer