Galehouse Gas Stations Inc
Question
Galehouse Gas Stations Inc. expects sales to increase from $1,640,000 to $1,840,000 next year. Galehouse believes
that net assets (Assets − Liabilities) will represent 45 percent of sales. His firm has an 10 percent return on sales and pays 35 percent of profits out as dividends.
a. What effect will this growth have on funds?
The cash balance will be?
b. If the dividend payout is only 15 percent, what effect will this growth have on funds?
The cash balance will be?
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