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What effect will this growth have on funds

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Galehouse Gas Stations Inc. expects sales to increase from $1,520,000 to $1,720,000 next year. Galehouse believes that net assets (Assets - Liabilities) will represent 35 percent of sales. His firm has an 9 percent return on sales and pays 50 percent of profits out as dividends.

a. What effect will this growth have on funds?

The cash balance will (increase or decrease) by

b. If the dividend payout is only 35 percent, what effect will this growth have on funds?

The cash balance will (increase or decrease) by

Reference no: EM132484246

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