Given the Following Information: Current Assets = $400; Fixed Assets

question 96

Multiple Choice

Given the following information: current assets = $400; fixed assets = $500; accounts payable = $100; notes payable = $45; long-term debt = $455; equity = $300; sales = $450; costs = $400; tax rate = 34%. Suppose that current assets, costs, and accounts payable maintain a constant ratio to sales. If the firm is producing at 80% capacity, what is the total external financing needed if sales increase 25%? Assume the firm pays no dividends.

• A) $33.75
• B) $66.25
• C) $143.75
• D) $172.50
• E) $380.25

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Definitions:

Sensitivity Training

A form of training designed to help individuals develop empathy and improve interpersonal communication through better understanding of others' feelings and perspectives.

Psychoanalysis

A therapeutic approach and theory of personality developed by Sigmund Freud emphasizing unconscious motivations and conflicts.

Contingency Management

A type of behavioral therapy in which certain behaviors are reinforced by rewards or sometimes punishment to modify behavior.

Behavior Therapy

A type of psychotherapy focused on changing negative or unhealthy behaviors using learning principles and conditioning techniques.