As a firm grows, it must support increases in revenue with new investments in assets. the self-supporting growth model a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows (increases in noncash assets) and inflows (funds resulting from increases in liabilities or equity). consider this case: fuzzy button clothing company has no debt in its capital structure and has $300 million in assets. its sales revenues last year were $150 million with a net income of $10 million. the company distributed $1.05 million as dividends to its shareholders last year. what is the firm’s self-supporting, growth rate? (note: do not round your intermediate calculations.) a. 0.35% b. 3.08% c. 3.82% d. 1.36% which of the following are assumptions of the self-supporting growth model? check all that apply. a. the firm maintains a constant ratio of assets to equity. b. the firm maintains a constant net profit margin. c. the firm uses all equity and no debt financing. d. common stock is the firm’s only form of equity.

The following balance sheet for the los gatos corporation was prepared by a recently hired accountant. in reviewing the statement you notice several errors. los gatos corporation balance sheet at december 31, 2018 assets cash $ 44,000 accounts receivable 86,000 inventories 57,000 machinery (net) 122,000 franchise (net) 32,000 total assets $ 341,000 liabilities and shareholders' equity accounts payable $ 54,000 allowance for uncollectible accounts 7,000 note payable 59,000 bonds payable 112,000 shareholders' equity 109,000 total liabilities and shareholders' equity $ 341,000 additional information: cash includes a $22,000 restricted amount to be used for repayment of the bonds payable in 2022. the cost of the machinery is $194,000. accounts receivable includes a $22,000 note receivable from a customer due in 2021. the note payable includes accrued interest of $7,000. principal and interest are both due on february 1, 2019. the company began operations in 2013. income less dividends since inception of the company totals $37,000. 52,000 shares of no par common stock were issued in 2013. 200,000 shares are authorized. required: prepare a corrected, classified balance sheet. (amounts to be deducted should be indicated by a minus sign.)

Seattle bank’s start-up division establishes new branch banks. each branch opens with three tellers. total teller cost per branch is $96,000 per year. the three tellers combined can process up to 90,000 customer transactions per year. if a branch does not attain a volume of at least 60,000 transactions during its first year of operations, it is closed. if the demand for services exceeds 90,000 transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations. required what is the relevant range of activity for new branch banks

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