Chapter 15 2 Suppose Firm Has Had The Historical

30.

Suppose that BBM Industries, Inc. currently has the balance sheet shown as follows, and

that sales for the year just ended were $2 million. The firm also has a profit margin of 5

percent, a retention ratio of 50 percent, and expects sales of $2.5 million next year. If all

assets and current liabilities are expected to increase with sales, what amount of

additional funds will the company need from external sources to fund the expected

growth?

31.

Suppose that TV Industries, Inc. currently has the balance sheet shown as follows, and

that sales for the year just ended were $5 million. The firm also has a profit margin of 15

percent, a retention ratio of 25 percent, and expects sales of $5.5 million next year. If all

assets and current liabilities are expected to increase with sales, what amount of

additional funds will the company need from external sources to fund the expected

growth?

32.

Suppose that Team Industries, Inc. currently has the balance sheet shown as follows, and

that sales for the year just ended were $3 million. The firm also has a profit margin of 20

percent, a retention ratio of 30 percent, and expects sales of $6 million next year. If all

assets and current liabilities are expected to increase with sales, what amount of

additional funds will the company need from external sources?

33.

Suppose a firm has had the historical sales figures shown as follows. What would be the

forecast for next year’s sales using regression to estimate a trend?

34.

Suppose a firm has had the historical sales figures shown as follows. What would be the

forecast for next year’s sales using regression to estimate a trend?

35.

Suppose a firm has had the historical sales figures shown as follows. What would be the

forecast for next year’s sales using regression to estimate a trend?

36.

Suppose a firm has had the historical sales figures shown as follows. What would be the

forecast for next year’s sales using regression to estimate a trend?

37.

Suppose that Runner Industries currently has the balance sheet shown as follows, and

that sales for the year just ended were $5 million. The firm also has a profit margin of 10

percent, a retention ratio of 20 percent, and expects sales of $7 million next year. If fixed

assets have enough capacity to cover the increase in sales and all other assets and

current liabilities are expected to increase with sales, what amount of additional funds will

the company need from external sources to fund the expected growth?

38.

Suppose that Wave Industries currently has the balance sheet shown as follows, and that

sales for the year just ended were $25 million. The firm also has a profit margin of 10

percent, a retention ratio of 20 percent, and expects sales of $27 million next year. If fixed

assets have enough capacity to cover the increase in sales and all other assets and

current liabilities are expected to increase with sales, what amount of additional funds will

the company need from external sources to fund the expected growth?

39.

Suppose that Road Industries currently has the balance sheet shown as follows, and that

sales for the year just ended were $80 million. The firm also has a profit margin of 5

percent, a retention ratio of 10 percent, and expects sales of $82 million next year. If fixed

assets have enough capacity to cover the increase in sales and all other assets and

current liabilities are expected to increase with sales, what amount of additional funds will

the company need from external sources to fund the expected growth?

40.

Suppose that the 2013 actual and 2014 projected financial statements for Counter Corp.

are initially as shown in the following tables. In these tables, sales are projected to rise 35

percent in the coming year, and the components of the income statement and balance

sheet that are expected to increase at the same 35 percent rate as sales are indicated

with an

italics

font. Assuming that Counter Corp. wants to cover the AFN with 60 percent

equity, 25 percent long-term debt, and the remainder from notes payable, what amount of

additional funds will they need to raise if debt carries an 8 percent interest rate?

41.

Suppose that the 2013 actual and 2014 projected financial statements for Carrier Corp.

are initially as shown in the following tables. In these tables, sales are projected to rise 40

percent in the coming year, and the components of the income statement and balance

sheet that are expected to increase at the same 40 percent rate as sales are indicated

with an

italics

font. Assuming that Carrier Corp. wants to cover the AFN with 50 percent

equity, 25 percent long-term debt, and the remainder from notes payable, what amount of

additional funds will they need to raise if debt carries a 10 percent interest rate?

42.

Suppose that the 2013 actual and 2014 projected financial statements for Cypress Corp.

are initially as shown in the following tables. In these tables, sales are projected to rise 15

percent in the coming year, and the components of the income statement and balance

sheet that are expected to increase at the same 15 percent rate as sales are indicated

with an

italics

font. Assuming that Cypress Corp. wants to cover the AFN with 35 percent

equity, 35 percent long-term debt, and the remainder from notes payable, what amount of

additional funds will they need to raise if debt carries a 9 percent interest rate?

43.

Suppose that the 2013 actual and 2014 projected financial statements for Camera Corp.

are initially as shown in the following tables. In these tables, sales are projected to rise 40

percent in the coming year, and the components of the income statement and balance

sheet that are expected to increase at the same 40 percent rate as sales are indicated

with an

italics

font. Assuming that Camera Corp. wants to cover the AFN with 40 percent

equity, 30 percent long-term debt, and the remainder from notes payable, what amount of

additional funds will they need to raise if debt carries a 7 percent interest rate?

44.

Suppose that the 2013 actual and 2014 projected financial statements for Cramner Corp.

are initially as shown in the following tables. In these tables, sales are projected to rise 35

percent in the coming year, and the components of the income statement and balance

sheet that are expected to increase at the same 35 percent rate as sales are indicated

with an

italics

font. Assuming that Cramner Corp. wants to cover the AFN with 45 percent

equity, 25 percent long-term debt, and the remainder from notes payable, what amount of

additional funds will they need to raise if debt carries an 8 percent interest rate?

45.

Suppose a firm has had the historical sales figures shown as follows. What would be the

forecast for next year’s sales using the naїve approach?