Purchase Solution

Self-supporting growth rate

Not what you're looking for?

Ask Custom Question

Bannister Legal Services generated $4,000,000 in sales during 2010, and its year-end total assets were $2,800,000. Also, at year-end 2010, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accruals. Looking ahead to 2011, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 4%, and its payout ratio will be 40%. How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self-supporting growth rate? Round your answer to the nearest cent.

Purchase this Solution
Solution Summary

The solution explains how to determine the self-supporting growth rate

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • how to find growth rate

    How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self supporting growth rate? Welcome to BrainMass.com! Please rate 5/5 for my notes and ideas.

  • Corporate Valuation and Governance

    -supporting growth rate-The rate at which an object or item can grow in sales without extra help E.

  • AFN Equation and Assumptions

    What is meant by the term "self-supporting growth rate?" How is this rate related to the AFN equation, and how can that equation be used to calculate the self-supporting growth rate? 3.

  • Investment: Compounding, Discount Rate, FV, growth rate, value of stock

    38949 Investment: Compounding, Discount Rate, FV, growth rate, value of stock 1. You invest in an investment that pays 22 equal annual payments of $70 at the beginning of each of the next 22 years.

  • Present Value

    Provide supporting analysis. (d) What would your endowment have to be to accommodate annual scholarships of $300,000 with a constant growth rate of 1% annually?

  • Investments: PV, discount rate, compounding, FV, NPV, growth rate, preferred stock

    38964 Investments: PV, discount rate, compounding, FV, NPV, growth rate, preferred stock 1. You invest in an investment that pays 22 equal annual payments of $70 at the beginning of each of then next 22 years.

  • Rate of growth of wages subject to Social Security taxes

    504852 Rate of growth of wages subject to Social Security taxes Suppose the real rate of growth of wages subject to Social Security taxes is expected to average 1% per year during the next 40 years.

  • Social worker's role in support through social work programs

    Supporting and assessing during home visitations Social worker's role in supporting children, women, men and families through social work programs and services How can social workers serve their clients more effectively in these areas?

  • Expected U.S. GDP Growth Rate.

    GDP Growth Rate. What is the expected GDP Growth Rate in the U.S.? What are trends, forecasts, and statistics? How is GDP determined? How is GDP interpreted?

View More Related Solutions