Chapter 15 3 Suppose Firm Has Had The Historical

46.

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?

47.

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?

48.

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

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

49.

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

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

50.

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

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

51.

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

that sales for the year just ended were $20 million. The firm also has a profit margin of 22

percent, a retention ratio of 42 percent, and expects sales of $30 million next year. If all

assets and current liabilities are expected to grow with sales, how much additional funds

will Gyp Sum need from external sources to fund the expected growth?

52.

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

that sales for the year just ended were $6 million. The firm also has a profit margin of 9

percent, a retention ratio of 5 percent, and expects sales of $8.5 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, how much additional funds will Psy

Ops need from external sources to fund the expected growth?

53.

Goldilochs Inc. reported sales of $5 million and net income of $1 million. The firm has

$10.5 million in total assets. The firm’s chief financial officer is projecting a 20 percent

increase in sales. If the firm’s sales do increase by 20 percent, it is expected that

spontaneous liabilities will increase by $1 million. The firm currently pays out 30 percent

of its net income to shareholders. Assuming that all assets are expected to grow with

sales, how much in additional funds will Goldilochs need from external sources to fund the

expected growth?

54.

Goldilochs Inc. reported sales of $8 million and net income of $1.5 million. The firm has

$10.5 million in total assets. The firm’s chief financial officer is projecting a 20 percent

increase in sales. If the firm’s sales do increase by 20 percent, it is expected that

spontaneous liabilities will increase by $500,000. The firm currently pays out 30 percent of

its net income to shareholders. Assuming that all assets are expected to grow with sales,

how much in additional funds will Goldilochs need from external sources to fund the

expected growth?

55.

Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that

sales for the year just ended were $15 million. The firm also has a profit margin of 23

percent, a retention ratio of 40 percent, and expects sales of $20 million next year. If all

assets and current liabilities are expected to grow with sales, what is the projected

increase in retained earnings?

56.

Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that

sales for the year just ended were $15 million. The firm also has a profit margin of 23

percent, a retention ratio of 40 percent, and expects sales of $20 million next year. If all

assets and current liabilities are expected to grow with sales, how much will spontaneous

liabilities increase with the increase in sales?

57.

Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that

sales for the year just ended were $15 million. The firm also has a profit margin of 23

percent, a retention ratio of 40 percent, and expects sales of $20 million next year. If all

assets and current liabilities are expected to grow with sales, what is the necessary

increase in assets?

58.

Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that

sales for the year just ended were $15 million. The firm also has a profit margin of 19

percent, a retention ratio of 30 percent, and expects sales of $22 million next year. If all

assets and current liabilities are expected to grow with sales, what is the projected

increase in retained earnings?

59.

Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that

sales for the year just ended were $15 million. The firm also has a profit margin of 20

percent, a retention ratio of 30 percent, and expects sales of $22 million next year. If all

assets and current liabilities are expected to grow with sales, how much will spontaneous

liabilities increase with the increase in sales?

60.

Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that

sales for the year just ended were $12 million. The firm also has a profit margin of 20

percent, a retention ratio of 30 percent, and expects sales of $22 million next year. If all

assets and current liabilities are expected to grow with sales, what is the necessary

increase in assets?

61.

Which of the following will increase the additional funds needed from external sources?

62.

Which of the following will increase the additional funds needed from external sources?

63.

Which of the following will decrease the additional funds needed from external sources?

64.

Which of the following statements is correct?

65.

All of the following will tend to increase spontaneously with sales EXCEPT:

66.

Which of the following will increase a firm’s need for additional funds?

67.

What would be the appropriate way to forecast sales for a firm that has stable year–to–

year sales, but seasonally fluctuating month-to-month sales?

68.

Silly Putty Inc. has had sales of $12 million, $17 million, and $16 million for each of the last

three years. What would be the MAPE if the actual sales were $15 million using the naїve

approach?