Decker Enterprises
Below Are the Simplified Current and Projected Financial

question 5

Multiple Choice

Decker Enterprises
Below are the simplified current and projected financial statements for Decker Enterprises. All of Decker's assets are operating assets. All of Decker's current liabilities are operating li abilities.
$\begin{array} { l c r } \text { Income statement } & \text { Current} & \text { Projected } \\ \text { Sales } & \text { na } & 1,500 \\ \text { Costs } & \text { na } & 1,080 \\ \text { Profit before tax } & \text { na } & 420 \\ \text { Taxes } ( 25 \% ) & \text { na } &\underline{ 105} \\ \text { Net income } & \text { na } & 315 \\ \text { Dividends } & \text { na } & 95 \end{array}$
$\begin{array} { l r r l r r } \text { Balance sheets } & \text { Current } & \text { Projected } & & \text { Current } & \text { Projected } \\ \text { Current assets } & 100 & 115 & \text { Current liabilities } & 70 & 81 \\ \text { Net fixed assets } & 1,200 & 1,440 & \text { Long-term debt } & 300 & 360 \\ & & & \text { Common stock } & 500 & 500 \\ & & & \text { Retained earnings } & 430 & 650 \end{array}$
-Based on the projections, Decker will have

• A) a financing surplus of $36
• B) a financing deficit of $36
• C) a financing surplus of $255
• D) a financing deficit of $255
• E) zero financing surplus or deficit

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Definitions:

Line L

Represents the relationship between the quantity of labor hired and the amount of output produced, often used in economics to illustrate productivity.

Income Received

The total amount of money received by an individual or entity during a specified time frame, from all sources.

Highest Quintile

Refers to the top 20 percent of the population or distribution in terms of income, wealth, or other measurable attributes.

Income Received

The total amount of money or its equivalent received by an individual or organization before taxes and deductions.