Calculate United’s total assets if the firm expects sales to grow by 15% this ye

Question

Calculate United’s total assets if the firm expects sales to grow by 15% this year and the earnings after tax will be $50,000. United paid $20,000 in dividends last year and expects to increase dividends 10% this year. The firm will need additional financing of $25,000 to finance the expected growth. United started the year with $40,000 in accounts payable; $30,000 in notes payable; and $100,000 in long-term debt. The company is operating at full capacity.


a.
$393,333

b.
$590,000

c.
$226,667

d.
$616,000

Explanation / Answer

c

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