Goldilochs Inc

question 24

Multiple Choice

Goldilochs Inc. reported sales of $8 million and net income of $2 million. The firm has a total asset turnover of 3.2. The firm's chief financial officer is projecting a $5 million increase in sales and that spontaneous liabilities will increase by $350,000 automatically. The firm currently pays out 80 percent 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) $501,900
• B) $562,500
• C) $601,800
• D) $446,600

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Definitions:

Arctic Tundra

A cold, vast, treeless region found in the Arctic where the subsoil is permanently frozen, supporting a limited range of plants and animals adapted to cold climates.

Arctic Foxes

A small mammal native to arctic regions known for its fur that changes color with the season, providing camouflage.

Polar Bears

Large, carnivorous bears native to the arctic region, known for their white fur which helps them blend in with their snowy environment.

Schooling

The process of providing systematic instruction, typically in a formal setting such as schools.