1. Given the following information: current assets = $400; fixed assets = $400; long-term debt = $455; equity = $300; sales = $470; costs = $400; tax rate = 34%. Suppose that assets and costs maintain a constant ratio to sales. What is the total external financing needed if sales increase 25%? Assume the firm pays no dividends.
Select one: a. $380.25 b. $143.75 c. $167.25 d. $183.75 e. $142.25
2. Based on the data below, with a collection period of 30 days what are cash collections in Q3? (format $xxx as needed, no cents)
Beginning A/R $335
a. Collection Period 45
b. Collection Period 60
c. Collection Period 30
Sales:
Q1 $545
Q2 $598
Q3 $575
Q4 $795