Download Chapter 4 - Fundamentals of Corporate Finance 9th Edition - Test Bank PDF

TitleChapter 4 - Fundamentals of Corporate Finance 9th Edition - Test Bank
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Page 13

73. What are the pro forma retained earnings for next year if Fake Stone, Inc. grows at a rate of 2.5 percent
and both the profit margin and the dividend payout ratio remain constant?


A. $4,946.90
B. $5,023.10
C. $5,592.20
D. $5,920.67
E. $6,293.30


74. Assume that net working capital and all of the costs of Fake Stone, Inc. increase directly with sales. Also

assume that the tax rate and the dividend payout ratio are constant. The firm is currently operating at full
capacity. What is the external financing need if sales increase by 4 percent?


A. -$1,214.48
B. -$804.15
C. -$397.19
D. $201.16
E. $525.38









75. Hungry Howie's is currently operating at 78 percent of capacity. What is the full-capacity level of sales?




A. $21,106.00
B. $21,580.62
C. $22,179.49
D. $24,506.17
E. $25,301.91


76. Hungry Howie's is currently operating at 82 percent of capacity. What is the total asset turnover ratio at

full capacity?


A. .68
B. .78
C. .95
D. 1.29
E. 1.46

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