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Unformatted text preview: SEP OCT NOV DEC Cash Flow 1200 6800 11200 15200 Beg. Balance 5000 6200 5000 3200 Cum. Balance 6200 13000 16200 18400 Monthly loan-8000-13000-6000 Cum. Loan End Balance 6200 5000 3200 12400 4.) Sales (profit margin) = $200M (.12) = $24M in profit Divident payout = $200M (.4) = $80M Sales increase = $200M (.15) = $30M + $200M = $230M Next years profit = $230M (.12) = $27.6M a.) Profits dividends = $27.6M - $92M = $(64.4)M The (64.4M) resulting from the large amount of dividends compared to profit means that external financing will be required for the company during the coming year. b.) If profits = 14% and dividends = 70% Profits dividends = 32.2M - 161M = $(128.8) M Even with profits increasing, dividends to be paid increased by such a large amount that JumpCampanellis would need to finance $128.8M externally in order to keep paying its extremely high dividends....
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- Fall '09