a. If sales increase by 20% in 2020 and the company uses a strict percentage of sales planning model (meaning that all items on the income and balance sheet also increase by 20%), what must be the balancing item? b. What will be the value of this balancing item?

a. If sales increase by 20% in 2020 and the company uses a strict percentage of sales planning model (meaning that all items on the income and balance sheet also increase by 20%), what must be the balancing item? b. What will be the value of this balancing item?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 11MC

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a. If sales increase by 20% in 2020 and the company uses a strict percentage of sales planning model (meaning that all items on the
income and balance sheet also increase by 20%), what must be the balancing item?
b. What will be the value of this balancing item?

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