What is its self-supporting growth rate

Assignment Help Financial Management
Reference no: EM131183590

Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $3,000,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and $200,000 of accruals. Looking ahead to 2014, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 5%, and its payout ratio will be 40%. How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self-supporting growth rate? Do not round intermediate steps. Round your answers to the nearest whole. Sales can increase by $ , that is by %.

Reference no: EM131183590

Questions Cloud

What is the expected rate of return on the project : What type of risk does the standard deviation and CV measure?
Proteins are polymers of amino acids : Proteins are polymers of amino acids. Draw a general diagram of an amino acid. Describe three types of biological functions of proteins.
Desires to lease numerically controlled milling machine : The Jacobs company desires to lease a numerically controlled milling machine costing $200,000. Jacobs has asked both First Manufacters Bank Leasing Corporation and Commercial Associates, Inc to quote an annual lease rate. Both leasing companies now r..
Describe any sources of risk or uncertainty in its operation : Describe any sources of risk or uncertainty in its operations. Do the financial reports indicate risky or uncertain activities or changes to the economic environment that ultimately appear to have affected the company's financial outcomes? Be specifi..
What is its self-supporting growth rate : Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $3,000,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..
Examples of polymers made of amino acids : What are some examples of polymers made of amino acids? What are the two ways energy transfers between the system and its surrounding?
What are the weaknesses of the capm : What is the Capital Asset Pricing Model (CAPM)? The security market line (SML)?
What is the book value per share-what is earnings per share : Dudley Hill Golf Club's market-to-book ratio is currently 1.7 times and the PE ratio is 6.35 times. Dudley Hill Golf Club's common stock is currently selling at $13.94 per share. What is the book value per share? What is the earnings per share?
List the differences in product offerings : Choose a doughnut/cinnamon bun/bread company with presence in two global markets. Access the two countries' specific Web sites for the product you wish to discuss. List the differences in product offerings in these 2 host countries and then compare..

Reviews

Write a Review

Financial Management Questions & Answers

  Forecast the overall expected return and standard deviation

The end-of-year stock prices for KFD Corporation for the past six years, and annual dividends per share, are as follows: Calculate the annual returns on KFD Corporation’s stock for the years 2005– 2009. Determine the geometric and arithmetic means fo..

  What is the discount rate that should be set for the project

Bono is considering a project that will result in initial aftertax cash savings of $3.8 million at the end of the first year, and these savings will grow at a rate of 5 percent per year indefinitely. What is the discount rate that should be set for t..

  Interest-sensitive assets

The portfolio managers of a firm determined that over the next year interest-sensitive assets are in the amount of $1.5 billion while interest-sensitive liabilities are in the amount of $1.8 billion. What will happen to net interest income and relati..

  What is the new cost of goods sold percent of sales

The firm manufactures a global positioning system (GPS) that sells for $2,000, with cost of goods sold (hardware 30% and software 70%) of 55% of sales. What is the new cost of goods sold percent of sales for each of the countries

  What is the equilibrium expected growth rate

Gay Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25). The stock sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever..

  Find the present equivalent value and equivalent value

The property appraisal office for Mobile County has just installed new software to track residential market values for property tax computations. The manager wants to know the total equivalent cost of all future costs incurred when the county commiss..

  What single payment could be made at beginning of first year

You need $25,356 at the end of 9 years, and your only investment outlet is an 9 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year. What s..

  Transactions takes place in secondary markets

Which of the following transactions takes place in secondary markets?

  Fixed costs and variable costs-determine the profit

A manufacturing company has fixed costs of $120,000 per month and variable costs of $6 per unit. Determine the profit for each of these scenarios.

  What is the current value of the companys stock

JJ Industries will pay a regular dividend of $2.40 per share for each of the next four years. At the end of the four years, the company will also pay out a $40 per share liquidating dividend, and the company will cease operations. If the discount rat..

  The company is expected to maintain constant

Universal Exports is expected to pay the following dividends over the next four years: $7, $5, $3, and $1. Afterwards the company is expected to maintain a constant 5 percent growth rate in dividends. If the required return is 16 percent, what is the..

  Provision of public goods by private market is characterized

The value of an input in its next best use is which of the following? Which of the following is the approach taken to determine how individuals value an option by looking at their actions? The provision of public goods by a private market is characte..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd