Forecasted amount of net working capital next year

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1. A company has forecasted net income to be $540,000. Net income was $425,000 in the prior year, when they also paid dividends of $80,000. What are forecasted dividends if the company wants to keep the payout ratio constant?

$80,000

$438,353

$101,647

$62,963

2. For the current year sales are $1,400,000, current assets are $101,524, and current liabilities are $85,265. If sales are forecasted to increase 14% next year, and all current assets and current liabilities vary proportionally with sales (i.e. they are spontaneous items), what is the forecasted amount of net working capital next year?

$16,259

$18,210

$18,373

$18,535

Reference no: EM131889927

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