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If Kooshy Company forecasts a 20% sales increase what will its pro forma cost of goods sold be assuming it remains at the same percent of sales

If Kooshy Company forecasts a 20% sales increase, what will its pro forma cost of goods sold be, assuming it remains at the same percent of sales?

a.$576

b.$635

c.$691

d.$720

 

 

 

38.Suppose Kooshy wishes to maintain a minimum $10 million cash balance, accounts receivable are forecast to be 15% of sales, and inventory is expected to be 12% of forecast sales. Also, the firm plans to add $35 million to fixed assets (depreciate the additional assets over seven years). What is the pro forma level of total assets if sales are forecasted to increase 20%?

a.$487

b.$435

c.$519

d.$615

 

 

 

39.Refer to Kooshy. Suppose pro forma net income is $50 and pro forma total assets are $525. If accounts payable maintain the same percent of sales, no new long term debt is issued, and the only addition to owners’ equity is to retained earnings, what will be the pro forma balance in notes payable for a forecasted 20% increase in sales? (That is, use notes payable as the balancing account.)

a.$39

b.$74

c.$83

d.$4

 

 

 

40.Kooshy Company wishes to maintain its dividend policy in the upcoming year. What will be the pro forma addition to retained earnings if sales are forecasted to increase 20% and all costs are proportional to sales?

a.$5

b.$37

c.$50

d.$45

 

 

 

41.Using ratios derived from the income statement and balance sheet above, what is Kooshy Company’s sustainable growth rate?

a.10.6%

b.17.7%

c.20.00%

d.8.1%

 

 

 

42.Using ratios derived from the income statement and balance sheet above, what is Kooshy Company’s “shorthand” estimate of external funds required (EFR) for a 20% increase in sales?

a.-$4

b.$0

c.$29

d.$160

Feb 13 2020 View more View Less

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