Question : 63.The Retail Company currently has assets of $3,000,000 and accounts : 1325762

 

 

63.The Retail Company currently has assets of $3,000,000 and accounts payable of $200,000. The firm’s sales last year were $10,000,000 with a net profit margin of 1%. If the firm anticipates next year’s sales to grow by 8% over that of last year and the firm pays out 25% of its net income in dividends, then what is the estimated external funds requirement for Retail?

a.$16,000

b.$81,000

c.$143,000

d.$240,000

 

 

 

64.A firm currently has $2,000,000 in assets and $1,000,000 in accounts payable. If the firm expects sales to increase by 10% from last year to next year, then what is the estimated external funds required if the firm pays all of its net income to shareholders?

a.$100,000

b.$1,000,000

c.$2,000,000

d.none of the above

 

 

 

65.Milton Gaming Company currently has assets of $3,000,000 and accounts payable of $200,000. The firm’s sales last year were $10,000,000. If the firm anticipates next year’s sales to grow by 8% over that of last year and the firm pays out 25% of its net income in dividends, then what net profit margin is required in order to have the estimated external funds required be equal to zero?

a.27.00%

b.25.00%

c.2.77%

d.2.50%

 

 

 

66.Which of the following is a source of discretionary or external financing?

a.a new debt issue

b.accounts payable

c.a new equity issue

d.both a and c

 

 

 

67.If a company prefers to finance its required assets with a larger portion of short-term debt, then that firm is utilizing a(n)

a.conservative financing strategy.

b.aggressive financing strategy.

c.matching strategy.

d.none of the above.

 

 

 

68.If a company prefers to finance its required assets with a small portion of short-term borrowings, then that firm is utilizing a(n)

a.conservative financing strategy.

b.aggressive financing strategy.

c.matching strategy.

d.none of the above.

 

 

 

69.A firm that tends to finance permanent assets with long-term debt and seasonal assets with short-term borrowing is following

a.an aggressive financing strategy.

b.a conservative financing strategy.

c.a matching financing strategy.

d.none of the above.

 

 

 

70.Cash receipts include

a.cash sales.

b.accounts receivable collections.

c.both a and b

d.none of the above.

 

 

 

71.The Little Toy Company will start doing business in February and needs to forecast its total cash receipts for April. Its projected total sales are $15,000, $20,000, and $25,000 for February, March and April, respectively. Little Toy anticipates that 50% of sales will be for cash and 1/2 of credit sales will be collected the month after sale with the remained being collected 2 months after the sale. What the forecasted cash receipts to Little Toy in April?

a.$21,250

b.$17,500

c.$8,750

d.none of the above

 

 

 

 

 

72.Marsha Start is looking to restart a home economics related business after an unfortunate incarceration. She forecasts that sales for June, July, and August will be $100,000, $150,000, and $100,000, respectively. Start expects for cash sales to make up 25% of the sales in each month with 90% of the credit sales collected in the month after the sale and the remainder 2 months after the sale. What is Start’s estimated total cash collections for August?

a.$20,000

b.$101,750

c.$133,750

d.none of the above

 

 

 

 

 

 

 

73.Marsha Start is looking to restart a home economics related business after an unfortunate incarceration. She forecasts that sales for June, July, and August will be $100,000, $150,000, and $80,000, respectively. Start expects for cash sales to make up 25% of the sales in each month with 90% of the credit sales collected in the month after the sale and the remainder 2 months after the sale. What is Start’s estimated total cash collections in August for June sales?

a.$7,500

b.$101,750

c.$133,750

d.none of the above