What effect will this growth have on funds

Assignment Help Financial Management

Reference no: EM131450284

Galehouse Gas Stations Inc. expects sales to increase from $1,540,000 to $1,740,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 45 percent of sales. His firm has an 11 percent return on sales and pays 60 percent of profits out as dividends.

a. What effect will this growth have on funds?

b. If the dividend payout is only 25 percent, what effect will this growth have on funds?

eBook & Resources

eBook: Cash Budget

Reference no: EM131450284

Questions Cloud

What is the interest rate that bank pays : If you deposit $10,000 in a bank account that pays monthly interests and expect to receive $12,000 in 5 years, what is the interest rate that bank pays?

Use the dividend discount model : Calculate the company's weighted average cost of capital. Use the dividend discount model.

Explain the difference between two balance sheet dates : Which of the required financial statements explain the difference between two balance sheet dates?

No cash dividends during this period of time : Twenty-five years ago, you purchased 100 shares of XYZ, Inc. for $8 per share. XYZ paid out no cash dividends during this period of time,

What effect will this growth have on funds : Galehouse Gas Stations Inc. expects sales to increase from $1,540,000 to $1,740,000 next year. What effect will this growth have on funds?

What bid price should you submit : If your tax rate is 35% and you require a 13% return on your investment, what bid price should you submit?

The cash aows of a three-year risk-free bond : Write down the cash áows of a three-year risk-free bond that has face value of $1,000 and pays coupon C each year-end.

How much interest will you pay over the remaining years : How much interest will you pay over the remaining years of your mortgage now?

What are the required numbers of circuits in each group : If we require that the end-to-end GoS probability of loss for each call (internal and external) is no greater than 0.01 (1 in 100), what are the GoS probabilities of loss allowed for each of the two groups of circuits?

User Account

All Pages