Question: Required New Funds: Given: Variable Assets ...
Required New Funds:
Given: Variable Assets = $600,000
Variable Liabilities = $300,000
Profit Margin = 5%
Old Sales Level = $900,000
New Sales Level = $1,500,000
Dividend Payout Ratio = 40%
Required- :How much additional financing will be required to support sales growth from $900,000 per year to $1,500,000 per year. (Show all work)
RNF Question: Why are profits ALONE insufficient to finance growth?