Sales Costs EBIT Interest expense Taxable income INCOME STATEMENT, 2019 $ 240,000 170,000 $ 70,000 14,000...

 

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Sales Costs EBIT Interest expense Taxable income INCOME STATEMENT, 2019 $ 240,000 170,000 $ 70,000 14,000 $ 56,000 Taxes (at 21N) Net income 11,768 $ 44,240 Dividends $22,120 Addition to retained earnings $22,120 Cash Current assets Accounts receivable Inventories BALANCE SHEET, YEAR-END, 2019 Assets $ 7,000 12,000 21,000 Total current assets Net plant and equipment $ 40,000 180,000 220,000 Total assets Current Liabilities Accounts payable Liabilities Total current liabilities Long-term debt Stockholders' equity Common stock plus additional paid-in capital Retained earnings Total liabilities plus stockholders' equity $ 14,000 $ 14,000 140,000 15,000. 51,000 $220,000 Sales and costs are projected to grow at 30% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.50. What is the required external financing over the next year? (Enter excess cash as a negative number with a minus sign.) Answer is complete but not entirely correct. External financing (67,632) Sales Costs EBIT Interest expense Taxable income INCOME STATEMENT, 2019 $ 240,000 170,000 $ 70,000 14,000 $ 56,000 Taxes (at 21N) Net income 11,768 $ 44,240 Dividends $22,120 Addition to retained earnings $22,120 Cash Current assets Accounts receivable Inventories BALANCE SHEET, YEAR-END, 2019 Assets $ 7,000 12,000 21,000 Total current assets Net plant and equipment $ 40,000 180,000 220,000 Total assets Current Liabilities Accounts payable Liabilities Total current liabilities Long-term debt Stockholders' equity Common stock plus additional paid-in capital Retained earnings Total liabilities plus stockholders' equity $ 14,000 $ 14,000 140,000 15,000. 51,000 $220,000 Sales and costs are projected to grow at 30% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.50. What is the required external financing over the next year? (Enter excess cash as a negative number with a minus sign.) Answer is complete but not entirely correct. External financing (67,632)