Question

Berman & Jaccor Corporation's current sales and partial balance sheet are shown below. This year: Sales $1,000 Balance Sheet: Assets - Cash $150, Short-term investments $75, Accounts receivable $300, Inventories $200, Total current assets $725, Net fixed assets $450, Total assets $1,175. Sales are expected to grow by 10% next year. Assuming no change in operations from this year to next year, what are the projected total operating assets? Do not round intermediate calculations. Round your answer to the nearest dollar.

Answer 1

The projected total operating assets for Berman & Jaccor Corporation next year would be $1,293, assuming a 10% growth in sales and that all asset levels grow proportionally to this sales increase.

Step-by-step explanation:

To calculate the projected total operating assets of Berman & Jaccor Corporation for next year, we will first calculate the expected sales growth and then assume that the asset levels will grow proportionally with sales, given that there is no change in operations.

The current sales are $1,000, and with a projected growth of 10%, next year's sales would be $1,100 ($1,000 * 1.10). Consequently, if the total current assets and net fixed assets grow at the same rate, we would calculate the projected total operating assets by multiplying each asset category by 1.10.

Step-by-step projection:

Calculate the growth factor: 10% growth implies a growth factor of 1.10.

Project the total current assets: $725 * 1.10 = $797.50.

Project the net fixed assets: $450 * 1.10 = $495.

Add the projected total current assets to the projected net fixed assets to find the projected total operating assets: $797.50 + $495 = $1,292.50.

After rounding to the nearest dollar, the projected total operating assets for next year would be $1,293.