BHS Inc Determines That Sales Will Rise from $400,000 to $550,000

question 43

Multiple Choice

BHS Inc. determines that sales will rise from $400,000 to $550,000 next year. Spontaneous assets are 60% of sales, and spontaneous liabilities are 30% of sales. BHS has an 8% profit margin and a 40% dividend payout ratio. What is the level of required new funds?

• A) $18,600
• B) $138,600
• C) $3,600
• D) No new funds are needed

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Definitions:

Fundus

The bottom or base of an organ, commonly referring to the upper part of the stomach or the interior surface of the eye opposite the lens.

Amenorrhea

The absence of menstruation, which can be either primary (not starting menstruation by a certain age) or secondary (stopping after it has begun).

Breast Tenderness

A symptom often associated with premenstrual syndrome, pregnancy, or other medical conditions, characterized by discomfort or sensitivity in one or both breasts.

Nausea

A sensation of unease and discomfort in the stomach with an urge to vomit, often a symptom of various conditions.