Goldilochs Inc

question 8

Multiple Choice

Goldilochs Inc. reported sales of $8 million and net income of $2 million. The firm has a total asset turnover of 1.2. The firm's chief financial officer is projecting a $6 million increase in sales and that spontaneous liabilities will increase by $1 million automatically. The firm currently pays out 50% of its net income to shareholders. Assuming that all assets and current liabilities are expected to grow with sales, how much in additional funds will Goldilochs need from external sources to fund the expected growth?

• A) $1,250,000
• B) $1,750,000
• C) $2,500,000
• D) $2,250,000

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Definitions:

Uniform Distribution

An equal likelihood for all outcomes characterizes this probability distribution.

Waiting Time

The duration of time that passes from a specified point until a particular event occurs, often analyzed in queueing theory to improve service processes.

Standardize

The process of adjusting values measured on different scales to a notionally common scale, often used in statistical analysis to compare data points.

Normal Curve

A symmetrical, bell-shaped curve that represents the distribution of many types of data; most scores are near the mean, with fewer scores at the extremes.