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Exquisite Fashion Limited expects its sales to increase 20% next year from its current level of $4.7 million. The company has current assets of $660,000, net fixed assets of $1.5 million, and current liabilities of $462,000. All assets are expected to grow proportionately with sales suggesting that al; assets and Assume Exquisite has a net profit margin of 10% and the company does not pay dividends over the period of the projected sales. Round to the nearest dollar.
(a) The projected total assets would be:
(b) Assuming that Exquisite has a net profit margin of 10%, what additional financing (AFN) will be needed to Support the increase in sales?
(c) Assuming you have calculated a negative (less than zero) for the Additional Funds Needed (AFN) in the above question then, and as we discussed in class, fully explain the implications of a negative AFN.
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The company has offered you a $5,000 bonus, which you may receive today, or 100 shares of the company’s stock, which has a current stock price of $50 per share. Mathematically, what is the best choice? Why?
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