Galehouse Gas Stations, Inc. expects sales to increase from $1,710,000 to $1,910,000 next year. Mr. Galehouse believes that net assets (Assets – Liabilities) will represent 45 percent of sales. His firm has a 8 percent return on sales and pays 20 percent of profits out as dividends.



(a)
What effect will this growth have on funds?

.


(b)
If the dividend payout is only 15 percent, what effect will this growth have on funds? (Omit the "$" sign in your response.)

a) There will be an increase in funds.

b) There will be an increase in cash and retained earnings due to less money being paid out to stockholders.

The Alliance Corp. expects to sell the following number of units of copper cables at the prices indicated, under three different scenarios in the economy. The probability of each outcome is indicated.


Outcome Probability Units Price
A .50 215 $ 18
B .30 350 33
C .20 470 43



What is the expected value of the total sales projection?

Total expected value $

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Cyber Security Systems had sales of 3,800 units at $80 per unit last year. The marketing manager projects a 15 percent increase in unit volume sales this year with a 10 percent price increase. Returned merchandise will represent 5 percent of total sales.


What is your net dollar sales projection for this year?

Net sales $

First you have to calculate the number of units of sales at the 15% increase. So take your sales in number of units last year times 115% to get your sales in number of units this year.

Now for the sales price increase you take your sales price from last year times 110% to get your sales price this year.

Now you know the number of units to be sold this year and the sales price this year so you can solve for total sales. Number of units * Sales Price = Total Sales

For returned merchandise simply take your total sales times 5%

For net sales take your total sales minus your returned merchandise, or take your total sales times 95%.