MC Qu. 45Wagner Industrial Motors, which is currently operating at full ... Wagn
ID: 2672608 • Letter: M
Question
MC Qu. 45Wagner Industrial Motors, which is currently operating at full ...Wagner Industrial Motors, which is currently operating at full capacity, has sales of $2,310, current assets of $650, current liabilities of $325, net fixed assets of $1,520, and a 5 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 10 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?
$242.55
$172.95
$231.00
$57.45
$11.55
MC Qu. 46The Cookie Shoppe expects sales of $s ...
The Cookie Shoppe expects sales of $1,900 next year. The profit margin is 5 percent and the firm has a 45 percent dividend payout ratio. What is the projected increase in retained earnings?
$23.51
$95.00
$71.49
$52.25
$42.75
MC Qu. 52Stop and Go has a $pm percent profit margin and a $dpop perce...
Stop and Go has a 6.0 percent profit margin and a 41 percent dividend payout ratio. The total asset turnover is 1.50 and the debt-equity ratio is .50. What is the sustainable rate of growth?
6.78 percent
7.01 percent
8.65 percent
7.97 percent
7.33 percent
MC Qu. 57The Two Sisters has a $roa percent return on assets and a $dpop per...
The Two Sisters has a 11 percent return on assets and a 30 percent retention ratio. What is the internal growth rate?
3.41 percent
7.11 percent
8.48 percent
7.70 percent
11.64 percent
MC Qu. 60 Major Manuscripts, Inc. does not want to incur any additional ...
Major Manuscripts, Inc.
2009 Income Statement
Net sales $7,700
Cost of goods sold 6,765
Depreciation 190
Earnings before interest and taxes $ 745
Interest paid 21
Taxable Income $ 724
Taxes 252
Net income $ 472
Dividends $ 212
Major Manuscripts, Inc.
2009 Balance Sheet
2009 2009
Cash $2,200 Accounts payable $1,600
Accounts rec. 860 Long-term debt 280
Inventory 2,600 Common stock $2,400
Total $5,660 Retained earnings 4,390
Net fixed assets 3,010
Total assets $8,670 Total liabilities & equity $8,670
Major Manuscripts, Inc. does not want to incur any additional external financing. The dividend payout ratio is constant. What is the firm's maximum rate of growth?
11.11 percent
2.51 percent
3.08 percent
3.97 percent
3.11 percent
MC Qu. 61 If Major Manuscripts, Inc. decides to maintain a constant ...
Major Manuscripts, Inc.
2009 Income Statement
Net sales $7,600
Cost of goods sold 6,615
Depreciation 200
Earnings before interest and taxes $ 785
Interest paid 22
Taxable Income $ 762
Taxes 266
Net income $ 497
Dividends $ 223
Major Manuscripts, Inc.
2009 Balance Sheet
2009 2009
Cash $2,200 Accounts payable $1,650
Accounts rec. 840 Long-term debt 300
Inventory 2,200 Common stock $2,600
Total $5,240 Retained earnings 3,870
Net fixed assets 3,180
Total assets $8,420 Total liabilities & equity $8,420
If Major Manuscripts, Inc. decides to maintain a constant debt-equity ratio, what rate of growth can it maintain assuming that no additional external equity financing is available.
4.19 percent
4.02 percent
4.41 percent
4.52 percent
4.43 percent
MC Qu. 78Hungry Howie's is currently operating at...
Hungry Howie's
2009 Income Statement
Net sales $ 4,800
Cost of goods sold 3,265
Depreciation 750
Earnings before interest and taxes $ 785
Interest paid 130
Taxable Income $ 655
Taxes 229
Net income $ 426
Dividends $ 50
Addition to retained earnings $ 376
Hungry Howie's
2009 Balance Sheet
2009 2009
Cash $ 40 Accounts payable $ 1,080
Accounts rec. 390 Long-term debt 1,740
Inventory 880 Common stock $ 2,100
Total $ 1,310 Retained earnings 3,190
Net fixed assets 6,800
Total assets $ 8,110 Total liabilities & equity $ 8,110
Hungry Howie's is currently operating at full capacity. The profit margin and the dividend payout ratio are held constant. Net working capital and fixed assets vary directly with sales. Sales are projected to increase by 5 percent. What is the external financing need?
$-52.35
$-40.69
$-43.04
$-36.49
$-35.56
P4-3 Calculating EFN [LO2]
The most recent financial statements for Zoso, Inc., are shown here (assuming no income taxes):
Income Statement Balance Sheet
Sales $4,400 Assets $14,900 Debt $10,600
Costs 3,390 Equity 4,300
Net income $1,010 Total $14,900 Total $14,900
________________________________________
Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year's sales are projected to be $5,972.
Required:
What is the external financing needed? (Do not round your intermediate calculations.)
$4,232.51
$3,702.51
$3,952.51
$4,077.51
$3,822.51
P4-4 EFN [LO2]
The most recent financial statements for GPS, Inc., are shown here:
Income Statement Balance Sheet
Sales $22,000 Assets $117,000 Debt $42,600
Costs 16,200 Equity 74,400
Taxable income $5,800 Total $117,000 Total $117,000
Taxes (30%) 1,740
Net income $4,060
________________________________________
Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,570 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $28,900.
Required:
What is the external financing needed?
$208,830
$28,614
$27,411
$29,816
$33,425
P4-5 EFN [LO2]
The most recent financial statements for Summer Tyme, Inc., are shown here:
Income Statement Balance Sheet
Sales $3,400 Current assets $5,200 Current liabilities $900
Costs 2,300 Fixed assets 4,800 Long-term debt 3,660
Taxable income $1,100 Equity 5,440
Taxes (32%) 352 Total $10,000 Total $10,000
Net income $748
________________________________________
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 60 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 30 percent.
Required:
What is the external financing needed? (Do not round your intermediate calculations.)
$2,391.04
$2,341.04
$1,098
$2,291.04
$2,611.04
Assume that the following ratios are constant.
Total asset turnover 1.31
Profit margin 6.9%
Equity multiplier 1.5
Payout ratio 63%
________________________________________
Required:
What is the sustainable growth rate? (Do not round your intermediate calculations.)
5.48%
-2.77%
9.44%
-1.64%
5.28%
P4-12 Internal Growth [LO3]
If the Baseball Shoppe has an 10 percent ROA and a 16 percent payout ratio, what is its internal growth rate? (Do not round your intermediate calculations.)
1.63%
10.45%
7.89%
10.64%
9.17%
MC Qu. 79What is the amount of the net cash from investment.......
Windswept, Inc.
2009 Income Statement
($ in millions)
Net sales $8,450
Less: Cost of goods sold 7,220
Less: Depreciation 420
Earnings before interest and taxes 810
Less: Interest paid 80
Taxable Income 730
Less: Taxes 256
Net income $ 475
Windswept, Inc.
2008 and 2009 Balance Sheets
($ in millions)
2008 2009 2008 2009
Cash $ 120 $ 150 Accounts payable $1,110 $1,130
Accounts rec. 930 780 Long-term debt 960 1,326
Inventory 1,470 1,510 Common stock $3,140 $2,940
Total $2,520 $2,440 Retained earnings 520 694
Net fixed assets 3,210 3,650
Total assets $5,730 $6,090 Total liab. & equity $5,730 $6,090
What is the amount of the net cash from investment activity for 2009?
$440 million
$860 million
$20 million
$275 million
$780 million
Explanation / Answer
MC Qu. 45Wagner Industrial Motors, which is currently operating at full ...
Wagner Industrial Motors, which is currently operating at full capacity, has sales of $2,310, current assets of $650, current liabilities of $325, net fixed assets of $1,520, and a 5 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 10 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?
$242.55
MC Qu. 46The Cookie Shoppe expects sales of $s ...
The Cookie Shoppe expects sales of $1,900 next year. The profit margin is 5 percent and the firm has a 45 percent dividend payout ratio. What is the projected increase in retained earnings?
$$1,900 x .05 (1 -0.450) = $22.50=$52.25
$52.25
MC Qu. 57The Two Sisters has a $roa percent return on assets and a $dpop per...
The Two Sisters has a 11 percent return on assets and a 30 percent retention ratio. What is the internal growth rate?
8.48 percent
MC Qu. 78Hungry Howie's is currently operating at...
Hungry Howie's
2009 Income Statement
Net sales $ 4,800
Cost of goods sold 3,265
Depreciation 750
Earnings before interest and taxes $ 785
Interest paid 130
Taxable Income $ 655
Taxes 229
Net income $ 426
Dividends $ 50
Addition to retained earnings $ 376
Hungry Howie's
2009 Balance Sheet
2009 2009
Cash $ 40 Accounts payable $ 1,080
Accounts rec. 390 Long-term debt 1,740
Inventory 880 Common stock $ 2,100
Total $ 1,310 Retained earnings 3,190
Net fixed assets 6,800
Total assets $ 8,110 Total liabilities & equity $ 8,110
Hungry Howie's is currently operating at full capacity. The profit margin and the dividend payout ratio are held constant. Net working capital and fixed assets vary directly with sales. Sales are projected to increase by 5 percent. What is the external financing need?
$-52.35
$-40.69
$-43.04
$-36.49
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