Starbucks had long-term debt of $200 million at the end of 2017 and sales are expected to grow by 20% in 2018. Net New Financing is expected to be $20,000 for 2018 and will be satisfied through the issuance of preferred stock. Compute the forecasted long-term debt at the end of 2018 using the percent of sales method.
a) not enough information is provided
b) $200 million
c) $220 million
d) $240 million
e) $160 million
2. Cash budgeting can be employed effectively by management to _____ .
a) control retained earnings
b) aid them in capital budgeting
c) identify potential cash flow problems in advance
d) coordinate cash and deferred expenses