Microtech Company is a retailer of small computers. Its balance sheet is given as follow: Microtech...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Microtech Company is a retailer of small computers. Its balance sheet is given as follow: Microtech Company Balance Sheet as of December 31, 2020 (in millions) $100 Accounts payable Cash Accounts receivable Inventories Total current assets Net fixed assets Total assets 200 200 Accruals 500 500 Notes payable Total current liabilities Mortgage loans Total liabilities Common stocks Retained earnings Total common equity $1,000 Total liabilities and equities $50 150 50 250 400 650 100 250 350 $1,000 Sales were $2,000 million and net income was $105 million in 2020. Microtech paid dividend of $42 million to common stockholders. Tax rate is 40%. Assume that Microtech operated at full capacity. All assets/sales ratios, spontaneous liabilities/sales ratios, profit margin and payout ratio are assumed to remain constant in the year 2021. Questions: 1. If sales are projected to increase by 10% during 2021, use the additional fund need method (AFN) to determine Microtech's external fund requirement. 2. Find the self-supporting growth rate of Microtech Inc.? Microtech Company is a retailer of small computers. Its balance sheet is given as follow: Microtech Company Balance Sheet as of December 31, 2020 (in millions) $100 Accounts payable Cash Accounts receivable Inventories Total current assets Net fixed assets Total assets 200 200 Accruals 500 500 Notes payable Total current liabilities Mortgage loans Total liabilities Common stocks Retained earnings Total common equity $1,000 Total liabilities and equities $50 150 50 250 400 650 100 250 350 $1,000 Sales were $2,000 million and net income was $105 million in 2020. Microtech paid dividend of $42 million to common stockholders. Tax rate is 40%. Assume that Microtech operated at full capacity. All assets/sales ratios, spontaneous liabilities/sales ratios, profit margin and payout ratio are assumed to remain constant in the year 2021. Questions: 1. If sales are projected to increase by 10% during 2021, use the additional fund need method (AFN) to determine Microtech's external fund requirement. 2. Find the self-supporting growth rate of Microtech Inc.?
Expert Answer:
Answer rating: 100% (QA)
1 If sales are projected to increase by 10 during 2021 use the additional fund ... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these finance questions
-
The firm operated at full capacity in 2002. During 2003, it expects sales to increase by 20 percent and dividends per share to increase to $ 1.10. Use the projected balance sheet method to determine...
-
Albertson Furniture Company is a retailer of home furnishings. It currently has stores in three cities' San Francisco, Los Angeles, and Phoenix. Operating data for the three stores in 2012 were as...
-
A La Mode Inc. (ALM) is a retailer of women and childrens clothing, with stores across Canada. ALM has been in operation for the past 35 years and is a public company with a year-end of January 31....
-
In Problems 1158, perform the indicated operation, and write each expression in the standard form a + bi. 6i 3 - 4i 5
-
There are several celebrated investors and stock pickers frequently mentioned in the financial press who have recorded huge returns on their investments over the past two decades. Is the success of...
-
Create a boxplot for the data in Exercise 5.2 using R or SPSS if possible. Exercises 5.2 Calculate the range, the variance, and the standard deviation for the Katz et al. data on SAT performance...
-
A single-degree-of-freedom system is subjected to Coulomb friction so that the equation of motion is given by \[\ddot{x}+f \frac{\dot{x}}{|\dot{x}|}+\omega_{n}^{2} x=0\] Construct the phase-plane...
-
Selected accounts from Murrays Furniture Stores adjusted trial balance as of June 30, 2014, the end of the fiscal year, follow. Required 1. Prepare a multistep income statement for Murrays....
-
14. Again two forces are applied to the cart with two different spring scales as shown below. The spring scale FA still reads 10.5 N. FB FA The cart moves with a constant velocity toward the right....
-
The financial statements of Saturn plc have been prepared as follows: Further information: (a) Extract from statement of income 000 Operating profit.........................1,008 Dividend...
-
What is the mathematical formula for ( A B).
-
A red blood cell typically carries an excess charge of about -2.5 10-12 C distributed uniformly over its surface. The red blood cells can be modeled as spheres approximately 7.0 m in diameter and...
-
What are the benefits of a mass population vaccination program? What are the risks? Why do U.S. public schools require that students be vaccinated against certain diseases? Should citizens be free to...
-
A car is driven east for a distance of 4 1 km , then north for 2 9 km , and then in a direction 2 6 \\ deg east of north for 2 3 km . Determine ( a ) the magnitude of the car\'s total displacement...
-
Go to the Cato Institute's home page (www.cato.org) and read the article - "How Rent Control Drives Out Affordable Housing" by William Tucker. After reading the article, answer the following...
-
1) Briefly describe problems with Canadian agriculture and various monopolies. 2) Explain how it affects the economy and various policies. 3) Explain Food insecurity and how various agricultural...
-
The government brought home ownership into reach for millions of American families by issuing large checks as direct aid. banning urban slums and redistributing the property. constructing new units...
-
You've been asked to take over leadership of a group of paralegals that once had a reputation for being a tight-knit, supportive team, but you quickly figure out that this team is in danger of...
-
In the chapter, there are two common types of valuation techniques noted. Explain the differences between these two models. Note when each of these techniques might be used in measuring financial...
-
Use the information from BE9.24, except that Julip Corporation is a private enterprise that applies ASPE. Prepare Julips 2020 entries to record all transactions and events related to its significant...
-
In early February 2020, Huey Corp. began construction of an addition to its head office building that is expected to take 18 months to complete. The following 2020 expenditures relate to the...
-
Dee commenced in self-employment on 6 April 2021. She initially prepared accounts to 5 April, but changed her accounting date to 31 July by preparing accounts for the four- month period to 31 July...
-
Stephen is a UK resident taxpayer with two different sources of income. He works part time as an IT consultant for a small number of clients, on a project management basis. A separate contract is...
-
Roseanne is a Scottish taxpayer. She starts trading on 1 July 2023 and prepares accounts for the 16 months to 31 October 2024. The adjusted trading profit for this period is 38,560. Her only other...
Study smarter with the SolutionInn App