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What effect will this growth have on funds

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Problem - Galehouse Gas Stations Inc. expects sales to increase from $1,670,000 to $1,870,000 next year. Galehouse believes that net assets (Assets - Liabilities) will represent 55 percent of sales. His firm has an 9 percent return on sales and pays 25 percent of profits out as dividends.

a. What effect will this growth have on funds?

b. If the dividend payout is only 5 percent, what effect will this growth have on funds?

Reference no: EM133035191

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