A Firm Has the Following Balance Sheet: Fixed Assets

question 47

Multiple Choice

A firm has the following balance sheet: Fixed assets are being used at 80 percent of capacity; sales for the year just ended were $200; sales will increase $10 per year for the next 4 years; the profit margin is 5 percent; and the dividend payout ratio is 60 percent.Assume that fixed assets cannot be sold.What are the total external financing requirements for the entire 4 years,i.e.,the total AFN for the 4-year period?

• A) $4.00
• B) $2.00
• C) -$0.80 (Surplus)
• D) -$14.00 (Surplus)
• E) $0

---

Definitions:

Trisomy 21

A genetic disorder caused by the presence of an all or part of an extra 21st chromosome, known as Down syndrome.

Monosomy

A chromosomal disorder characterized by the absence of one chromosome from the normal diploid number.

Milestone

An important event or achievement that marks a significant stage or progress in a process, project, or development.

Germinal Prenatal Period

The initial stage of fetal development, covering the first two weeks after conception when the zygote undergoes cell division and implantation in the uterine wall.