Projected increase in sales

Reference no: EM131015398

PRE-POST. FINANCIAL FORECASTING. For this and the next 5 questions. At the end of 2015, total assets for Neringa Tours were $1,200,000, of which current assets were $200,000. The firm's accounts payable were $375,000. Sales in 2015 were $2,500,000, and are expected to increase by 40 percent in 2016. Neringa Tours has no current liabilities other than accounts payable, which varies spontaneously with sales. In 2015, common stock amounted to $425,000, and retained earnings balance was $295,000. The company plans to raise new common stock in the amount of $75,000. The firm's net profit margin is 6%. Dividend payout ratio is 40%. The firm is operating at less than full capacity and does not plan to increase fixed asset investment to support new sales. However current assets will change directly with sales. Given the projected increase in sales, what will be the new level of TOTAL ASSETS for 2016?

$1,280,000
$1,200,100
$1,200,000
$1,260,000
None of the above

Reference no: EM131015398

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