P4-4 EFN [LO2]
The most recent financial statements for Cardinal, Inc., are shown here:
Income Statement
Balance Sheet
Sales
$22,100 Assets
$124,000 Debt
$34,600
Costs
17,400
Equity
89,400
Taxable
income
$4,700 Total
$124,000 Total
$124,000
Taxes (22%)
1,034
Net income
$3,666
Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,560
was paid, and the company wishes to maintain a constant payout ratio. Next year's sales
are projected to be $27,800.
What is the external financing needed?
Multiple Choice
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