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How much additional external capital will be required for next year if sales increase 15 percent?
To determine the additional external capital required for a 15% sales increase, you need to assess the current working capital and fixed asset needs. Calculate the projected increase in sales, then estimate the corresponding increase in assets and liabilities, considering factors like inventory and accounts receivable. Finally, the difference between the new asset requirements and the increase in spontaneous liabilities will give you the amount of external capital needed.
What else can I help you with?
What does source of finance mean?
sources of finance is where a business can get money from. there are two types where money can be found internal and external. internal are things like the owner's capital and external are things like loans.
Will a decrease in human capital decrease marginal product?
Yes, a decrease in human capital can lead to a decrease in marginal product. Human capital refers to the skills, knowledge, and experience possessed by individuals, which contribute to their productivity. When human capital declines, workers may become less efficient and innovative, resulting in lower output per additional unit of input. Consequently, the marginal product, or the additional output generated from an extra unit of labor or capital, is likely to decrease.
How do you calculate 5 percent interest per year compounded annually for 500 three years from today?
A 5% increase means that your capital increases by a factor of 1.05 each year. After three years, your capital will increase by a factor of 1.05 x 1.05 x 1.05, or 1.053. Calculate this and multiply it by the initial capital.
How do you compute interest compounded?
It helps calculations if you think about compound interest as your money increasing every period (for instance, every year) by a certain factor. For example, if you get 5% interest per annum, your capital will increase by a factor of 1.05 every year. If you repeat this, say, 10 years, then your capital will obviously increase by a factor of 1.0510.The detailed formula for the capital you have after a number of periods is thus:(initial capital) x (1 + rate/100)periodsIf you want to know only how much interest you earned, rather than the total money you'll have, just subtract the initial capital.
What happens if the IRR is greater than the required rate of return?
The IRR rule states that if the internal rate of return (IRR) on a project or investment is greater than the minimum required rate of return - the cost of capital - then the decision would generally be to go ahead with it. Conversely, if the IRR on a project or investment is lower than the cost of capital, then the best course of action may be to reject it.
What increases and what decrease capital or owners equity?
Increase capital through additional investment of the owner, increase in income Decrease capital through withdrawal of the money made by the owner, incur losses
If I add capital to business will you pay more tax?
Additional Capital Contributions to a business does not increase taxes. Increased earnings does.
Does capital investment can increase profit in business?
If you mean additional capital investment, YES in terms of amount BUT NOT necessarily in terms of percentage.
What is the journal entry to increase paid-up capital?
debit cashcredit share capital
Does additional stock increase retained earnings?
Retained earning only increased due to prior year operating profits and that's why it has no effect of any kind of additional capital introduced which directly increase the subscribed or paid up capital and not retained earnings.
How can a company increase stockholders equity?
- By generating GAAP earnings and not paying them as dividends - the retained earnings will increase. - By selling and increasing outstanding number of shares - the paid in capital will increase.
How do capital and human capital increase the wealth and income of nations?
how do capital and human capital increase the gdp wealth and income of nations
What is the journal entry for additional capital bought to business by partner?
the Journal entry for Additional capital brought to business partner Capital A/c Dr. To Partner Capital A/c
What is the normal balance of a additional paid-in capital account?
Additional Paid-in Capital is a normal credit balance account.
What would be the entry on authorized capital stock?
To increase a company's authorized capital, several forms and steps are typically required, varying based on jurisdiction. Here’s an overview of the general process: Board Resolution: The board of directors must pass a resolution approving the increase in authorized capital. This is the first step before filing any formal paperwork. Shareholder Approval: A shareholder meeting is often required, where shareholders approve the resolution to increase the capital. A special resolution may be passed. Filing with the Registrar: A company must file the relevant forms with the country’s corporate registry (e.g., Companies House in the UK, SEC in the US). These forms usually include: Form A (or equivalent): Detailing the increase in capital. Special Resolution: Certified copy of the shareholder resolution. Amended Articles of Association: Reflecting the new authorized capital. Payment of Fees: Filing fees may be due, depending on the increase in capital.
Where does additional paid in capital belong in the elements of financial statements?
Additional paid in capital is also part of paid in capital of business and shown as an addition to already exists paid in capital of business.
How do businesses use capital?
A business uses capital for research and development. Capital is also required for business expansion and for reducing operating costs. Capital is also needed to buy other businesses, which allows it to diversify. Verizon for example has capital to buy AOL and increase its exposure to more Internet business.
