What is the dollar value of ending inventory

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Reference no: EM131859724

1. CBA Corporation expects sales next year to be $80,000,000. Inventory and accounts receivable (combined) will increase $14,760,000 to accommodate this sales level. The company has a profit margin of 12 percent. Its dividend pay-out is 40 percent of profit. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.

A. Between $8,000,000 and $9,100,000 of external financing is needed.

B. Less than $8,000,000 of external financing is needed.

C. More than $9,100,000 of external financing is needed.

D. No external financing will be needed.

2. Samuelson will produce 35,000 units in March using level production. If each unit costs $800 to manufacture, what is the dollar value of ending inventory in March if beginning inventory is 18,000 units and march sales are 40,000 units?

A. Greater than $10,200,000

B. Less than $7,000,000

C. Between $7,000,000 and $10,200,000

D. There will be a shortage of inventory.

Reference no: EM131859724

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