question no. 5 includes the answer of ques 2 and 3 so I have attached answers of 2 and 3 as well.

Q Search (BUSI 2093 Introduction to Managerial Finance) ABC Inc. is a juice producer which has been growing steadily for the past 5 years. According to the expected market demand, the company is planning to grow its sales at 15% next year. Since the company is currently operating at full capacity, fixed assets will also grow proportional to sales, same as current assets and current liabilities. However, long-term debt and equity will not grow proportional to sales but rather management will decide upon their next year level based on an acceptable level of debt to equity ratio as well as ROE ratio. The company has a dividend pay-out ratio of 40%, which the management want to maintain in order to meet the shareholders' expectations. Below are the financial statements of ABC Inc. for the year ending Sept 2020. 1) Determine the value of the "External money needed" for next year. (Do not round intermediate calculations. Round the final answer to 2 decimal places, Omit commas, spaces and 5 sign) (10 Points) ABC's Balance Sheet Amounts in 000's ABC Inc. Income statement Amounts in 000's Sep-20 Sales 5,700 Costs 4,200 Taxable income 1.500 Taxes (34%) 510 Net income 990 Cash Accounts Receivables Inventory Current assets Fixed assets Total Assets Sep-20 Sep 20 200 Accounts Payable 2,000 1,600 Accrued Expenses 200 2,100 Current liabilities 2,200 3,900 Long-term debt 3,750 8.100 Equity 6,050 12,000 Total Liab & Equity 12,000 I! > 5 If the company has a strict target of not exceeding a Debt-Equity ratio of 65%, which option (raising debt or raising equity) would be the preferred option for the company based on your answers to questions (2) & (3)? (Points) Raising Debt Raising Equity if we assume that the company decided not to raise any external fund and depend solely on its own internally generated funds, what would be the maximum growth rate that it can achieve? (Do not round intermediate calculations. Round the final answer to 2 decimal places, do not leave spaces and only add a % sign) (10 points) USUILLUS USI 2093 - Case Study (1) (BUSI 2093 Introduction to Managerial Finance) 7 What is the company's sustainable growth rate? (Do not round intermediate calculations. Round the final answer to 2 decimal places, do not leave spaces and only add a % sign) (10 Points) Enter your answer 8 In addition to the planned 15% growth of the next year, the company is considering a future mega project of introducing a new entire production line that can increase its market share by 595. The company is planning for this expansion to take place four years from today when the company's production team is better prepared for such a leap in production. The total investment cost of this project is SIM and the company wants to finance it by 509 debt and 50% equity 8) How much does the company need to save every year for the coming four years to raise $1.5M, it its saving account earns an interest rate of 4%? (Do not found intermediate 6:52 a MENG De here to search O https://teams.microordcom/touw ins Close se Study (U (BUSI 2093 Introduction to Managerial Finance) 8) How much does the company need to save every year, for the coming tour years, to raise $1.5M, if its saving account earns an interest rate of 4%? (Do not found intermediate calculations. Round the final answer to 2 decimal places, Omit commas, spaces and S sign {10 Points) Enter your answer 9 If the company cannot save more than $250,000 per year, how much would it be able to raise in 4 years time given an interest rate on saving account of 496) (Do not round intermediate calculations. Round the final answer to 2 decimal places do not leave spaces, Omit commas spaces or s sign) (10 points) Enter your answer ENG 6:58 PM 2000-11-01 O DI 23 - Case Study (1) (BUSI 2093 Introduction to Managerial Finance) Enter your answer 10 How long would it take the company to cover the required $1.5M if it saves $250,000 a year? (In the space below write down the number of years and round your answer to two decimal places) (10 Points) Enter your answer Submit go This content created by the owner of the form. The data you subtill be sent to the form owne Novatour o alt CE to search 8. 2990 X100 2 3750 2. Calculation of Current ROE Net Income 2 890 Equity Capitel 6050 Retwww.on quity 6050 pline & 16,361 Calculation of Debt Equity Ratio Curent Debt - 3750 Aument Equity boso Retomon Equity aho Debt Debt Equity Ratio Equity 6050 70.6198 0.621 rowd off Now, if the company decides to raise the money New Delet 3750t 1470 5290 New Equity = 6050 Net Income 1138. Equity Capitel z boso Equity boso I from debt, then Return on ow 2 1138 Xloo w 5923 3 eet de la Now, revised debt ratio. who excity Equity 605 og Debe Equity ratio 2 0.86 3- of compassy deuioles te nause decides to raise money from equity New Delet 3750 New Equity 6050t 1470 27520 Now, Revised ROE Net Income 2 1138 Equity Capitel 75 20 25 309 huh ROE2 1138. x100 2) 15.13 | 7590 Les Revised Debt- Equity Ratio Debt 3750 Equity 7520 Debt Equity Ratio 0.49 7520 3750 ( Ger Q Search (BUSI 2093 Introduction to Managerial Finance) ABC Inc. is a juice producer which has been growing steadily for the past 5 years. According to the expected market demand, the company is planning to grow its sales at 15% next year. Since the company is currently operating at full capacity, fixed assets will also grow proportional to sales, same as current assets and current liabilities. However, long-term debt and equity will not grow proportional to sales but rather management will decide upon their next year level based on an acceptable level of debt to equity ratio as well as ROE ratio. The company has a dividend pay-out ratio of 40%, which the management want to maintain in order to meet the shareholders' expectations. Below are the financial statements of ABC Inc. for the year ending Sept 2020. 1) Determine the value of the "External money needed" for next year. (Do not round intermediate calculations. Round the final answer to 2 decimal places, Omit commas, spaces and 5 sign) (10 Points) ABC's Balance Sheet Amounts in 000's ABC Inc. Income statement Amounts in 000's Sep-20 Sales 5,700 Costs 4,200 Taxable income 1.500 Taxes (34%) 510 Net income 990 Cash Accounts Receivables Inventory Current assets Fixed assets Total Assets Sep-20 Sep 20 200 Accounts Payable 2,000 1,600 Accrued Expenses 200 2,100 Current liabilities 2,200 3,900 Long-term debt 3,750 8.100 Equity 6,050 12,000 Total Liab & Equity 12,000 I! > 5 If the company has a strict target of not exceeding a Debt-Equity ratio of 65%, which option (raising debt or raising equity) would be the preferred option for the company based on your answers to questions (2) & (3)? (Points) Raising Debt Raising Equity if we assume that the company decided not to raise any external fund and depend solely on its own internally generated funds, what would be the maximum growth rate that it can achieve? (Do not round intermediate calculations. Round the final answer to 2 decimal places, do not leave spaces and only add a % sign) (10 points) USUILLUS USI 2093 - Case Study (1) (BUSI 2093 Introduction to Managerial Finance) 7 What is the company's sustainable growth rate? (Do not round intermediate calculations. Round the final answer to 2 decimal places, do not leave spaces and only add a % sign) (10 Points) Enter your answer 8 In addition to the planned 15% growth of the next year, the company is considering a future mega project of introducing a new entire production line that can increase its market share by 595. The company is planning for this expansion to take place four years from today when the company's production team is better prepared for such a leap in production. The total investment cost of this project is SIM and the company wants to finance it by 509 debt and 50% equity 8) How much does the company need to save every year for the coming four years to raise $1.5M, it its saving account earns an interest rate of 4%? (Do not found intermediate 6:52 a MENG De here to search O https://teams.microordcom/touw ins Close se Study (U (BUSI 2093 Introduction to Managerial Finance) 8) How much does the company need to save every year, for the coming tour years, to raise $1.5M, if its saving account earns an interest rate of 4%? (Do not found intermediate calculations. Round the final answer to 2 decimal places, Omit commas, spaces and S sign {10 Points) Enter your answer 9 If the company cannot save more than $250,000 per year, how much would it be able to raise in 4 years time given an interest rate on saving account of 496) (Do not round intermediate calculations. Round the final answer to 2 decimal places do not leave spaces, Omit commas spaces or s sign) (10 points) Enter your answer ENG 6:58 PM 2000-11-01 O DI 23 - Case Study (1) (BUSI 2093 Introduction to Managerial Finance) Enter your answer 10 How long would it take the company to cover the required $1.5M if it saves $250,000 a year? (In the space below write down the number of years and round your answer to two decimal places) (10 Points) Enter your answer Submit go This content created by the owner of the form. The data you subtill be sent to the form owne Novatour o alt CE to search 8. 2990 X100 2 3750 2. Calculation of Current ROE Net Income 2 890 Equity Capitel 6050 Retwww.on quity 6050 pline & 16,361 Calculation of Debt Equity Ratio Curent Debt - 3750 Aument Equity boso Retomon Equity aho Debt Debt Equity Ratio Equity 6050 70.6198 0.621 rowd off Now, if the company decides to raise the money New Delet 3750t 1470 5290 New Equity = 6050 Net Income 1138. Equity Capitel z boso Equity boso I from debt, then Return on ow 2 1138 Xloo w 5923 3 eet de la Now, revised debt ratio. who excity Equity 605 og Debe Equity ratio 2 0.86 3- of compassy deuioles te nause decides to raise money from equity New Delet 3750 New Equity 6050t 1470 27520 Now, Revised ROE Net Income 2 1138 Equity Capitel 75 20 25 309 huh ROE2 1138. x100 2) 15.13 | 7590 Les Revised Debt- Equity Ratio Debt 3750 Equity 7520 Debt Equity Ratio 0.49 7520 3750 ( Ger