Reference no: EM133150407
Problem 1 - Kindred at Home is a home care agency operating in areas nationwide. During the past few years, the company reported the following revenues:
|
Year
|
Revenues (millions)
|
|
1
|
$2,058
|
|
2
|
$2,534
|
|
3
|
$2,472
|
|
4
|
$2,850
|
|
5
|
$3,000
|
|
6
|
?
|
Predict Kindred at Home's Year 6 revenue?
Problem 2 - LordHair Inc. had the following balance sheet last year:
Cash $800 Accounts payable $350
Accounts receivable $450 Accrued wages $150
Inventory $950 Notes payable $2,000
Net fixed assets $34,000 Mortgage $26,500
Total assets $36,200 Common stock $3,200
Retained earnings $4,000
Total liabilities and equity $36,200
The owner of LordHair has just invented a nonslip wig for cancer patients which she expects will cause sales to double from $10,000 to $20,000, increasing net income to $1,000. She feels that she can handle the increase without adding any fixed assets. Will the company need any outside capital if they pays no dividends and, if yes, how much?