Galehouse Gas Stations, Inc., expects sales to increase from $1,690,000 to $1,890,000 next year. Mr. Galehouse believes that net assets (Assets - Liabilities) will represent 65 percent of sales. His firm has a 11 percent return on sales and pays 35 percent of profits out as dividends.
(a)What effect will this growth have on funds?
The cash balance will change by $ .
(b)If the dividend payout is only 15 percent, what effect will this growth have on funds?