Homework Answers
Answer to Question 4:
Growth Rate = Next Year Sales / Current Year Sales - 1
Growth Rate = $11,904 / $9,600 - 1
Growth Rate = 1.24 - 1
Growth Rate = 0.24 or 24.00%
Increase in Assets = A0 * Growth Rate
Increase in Assets = $16,000 * 24%
Increase in Assets = $3,840
Proposed Income = Net Income * Growth Rate
Proposed Income = $2,130 * 24%
Proposed Income = $511.20
Addition to Retained Earnings = Proposed Income -
Dividends
Addition to Retained Earnings = $511.20 - $0
Addition to Retained Earnings = $511.20
External Financing Needed = Increase in Assets - Addition to
Retained Earnings
External Financing Needed = $3,840.00 - $511.20
External Financing Needed = $3,328.80
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FINANCE 4: Questions Question 1 (of 10) value 10.00 points The most recent financial statements for...
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