Suppose That the 2009 Actual and 2010 Projected Financial Statements

question 43

Multiple Choice

Suppose that the 2009 actual and 2010 projected financial statements for Cypress Corp are initially as shown below. In these tables, sales are projected to rise 15 percent in the coming year, and the components of the income statement and balance sheet that are expected to increase at the same 15 percent rate as sales are indicated with an italics font. Assuming that Cypress Corp wants to cover the AFN with 35 percent equity, 35 percent long-term debt, and the remainder from notes payable, what amount of additional funds will they need to raise if debt carries a 9 percent interest rate?

• A) $4,165 equity; $4,165 long-term debt; $3,570 notes payable
• B) $4,165 equity; $3,570 notes payable; $4,165 long-term debt
• C) $5,850 equity; $5,850 long-term debt; $0 notes payable
• D) none of these answers are correct

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