Question

Year 1 Sales revenues increase 3.5% Gross margin is 50% SG&A increases 1.2% Year 0 17,000 9,200 7,800 4,790 1,700 1,310 155 1,155 404 751 225 526 $2000 of PP&E is purchased on January 1, New PP&E is depreciated over 10 years Inventory grows in line with COGS Assume that all other asset accounts grow in line with sales (3.5%). Accounts Payable grow in line with COGS Accrued and deferred income taxes grows in line with taxes. Long-term debt declines by $200 Unless otherwise stated, liability accounts grow in line with sales (3.5%) Treasury Stock purchases equal $300 Average interest cost of all interest bearing debt is 1.6% Dividend payout ratio is 22% Tax rate is 35% Funding requirements should be financed with short-term debt

          Year 1						
Sales revenues increase 3.5%						
Gross  margin is 50%						
SG&A increases 1.2%				
Year 0
17,000 
9,200 
7,800 
4,790 
1,700 
1,310 
155 
1,155 
404 
751 

225 

526 
		
$2000 of PP&E is purchased on January 1, 						
New PP&E is depreciated over 10 years						
Inventory grows in line with COGS						
Assume that all other asset accounts grow in line with sales (3.5%).						
Accounts Payable grow in line with COGS						
Accrued and deferred income taxes grows in line with taxes.						
Long-term debt declines by $200						
Unless otherwise stated, liability accounts grow in line with sales (3.5%)						
Treasury Stock purchases equal $300						
Average interest cost of all interest bearing debt is 1.6%						
Dividend payout ratio is 22%						
Tax rate is 35%						
Funding requirements should be financed with short-term debt

Added by Vy N.

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