After-tax profit margin is forecasted

Assignment Help Financial Management

Reference no: EM13835088

Carter Corporation's sales are expected to increase from $5 million in 2012 to $6 million in 2013, or by 20%. Its assets totaled $4 million at the end of 2012. Carter is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2012, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. The after-tax profit margin is forecasted to be 6%.

Assume that the company pays no dividends.

Under these assumptions, what would be the additional funds needed for the coming year? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent.

Reference no: EM13835088

Questions Cloud

Maintain targets for modified duration at convexity : Assume that a portfolio of corporate bonds is managed to maintain targets for modified duration at convexity. Explain how the portfolio could include both callable and non callable bonds while maintaining the targets. Describe one advantage and one d..

What are the main qualities to look for in an lcd monitor : What are the main qualities to look for in an LCD monitor?

What was average annual risk premium on small-company stocks : What was the average annual risk premium on small-company stocks for the period 1926-2011?

What messages is this show giving to the child : Analyze how the chosen show might influence the growing child, based on your readings. What messages is this show giving to the child

After-tax profit margin is forecasted : Carter Corporation's sales are expected to increase from $5 million in 2012 to $6 million in 2013, or by 20%. Its assets totaled $4 million at the end of 2012. Carter is at full capacity, so its assets must grow in proportion to projected sales. Unde..

Ethan and leigh-ann enter an agreement in which ethan agrees : Ethan and Leigh-Ann enter an agreement in which Ethan agrees to sell Leigh-Ann exercise equipment. The terms of the agreement are delivery ex-ship. Ethan places the exercise equipment on a ship to Europe, where Leigh-Ann resides. While on the Atla..

Estimated of the stocks intrinsic value per share : Based on the corporate valuation model, the value of Serenity Inc. operations is $1,200 million. The company's balance sheet shows $80 million in accounts receivable, $60 million in inventory, and $100 million in market able securities. what is the b..

What is the molality of the solution : 100 ml of alcohol is made upto a litre with distilled water .If the density of the alcohol is 0.798 g/ml. what is the molality of the solution?

Buy the corporate bond since the break-even tax rate : A corporate bond is paying 8% and a municipal bond of similar risk is paying 5.5%, which would you prefer if you were currently in the 32% tax bracket: Buy the corporate bond since the break-even tax rate is 68.75% which is greater than our tax rate ..

User Account

All Pages