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anzhelika [568]
3 years ago
10

Broussard Skateboard's sales are expected to increase by 25% from $8.6 million in 2019 to $10.75 million in 2020. Its assets tot

aled $2 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 45%.
Required:
Use the AFN equation to forecast Broussard's additional funds needed for the coming year.
Business
1 answer:
Sonbull [250]3 years ago
4 0

Answer:

$236,500

Explanation:

Using the AFN equation to forecast Broussard's additional funds

Sales expected in 2019 2,150,000

( 8,600,000* .25)

After-tax profit margin 430,000

(10,750,000*4%)

Dividend payments 193,500

[$430,000 * 45%]

Addition to retained earnings $236,500

[$430,000 - $193,500]

Therefore forecast Broussard's additional funds needed for the coming year will be $236,500

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Using the above information, which kind of investor would likely turn the greatest profit in this market, given that each of the
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8 0
3 years ago
Assets Liabilities
olganol [36]

Answer:

1. What is the net working capital for the above company?

Net Working Capital will be 45

2. If the company pays back all of its accounts payable today using cash, what will its net working capital be (in million of USDs)?

Net Working Capital will be 45

3. If the company buys new property, plant and equipment today using its entire cash balance, what will its net working capital be (in million of USDs)?

Net Working Capital will be -1

Explanation:

1.

Net Working Capital = Total Current Asset - Total Current Liabilities

Net Working Capital = 89 - 44 = 45

2.

Current Asset after payment = 89 - 39 = 50

Current Liabilities after payment = 44 - 39 = 5

Net Working Capital = Total Current Asset - Total Current Liabilities

Net Working Capital = 50 - 5 = 45

3.

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Net Working Capital = 43 - 44 = -1

4 0
3 years ago
Taylor Company has current sales of 1,000 units, which generates sales revenue of $190,000, variable costs of $76,000 and fixed
Leya [2.2K]

Answer:

The change in net operating income after the changes by $14,200

Explanation:

For computing the change in net operating income, first, we have to compute the contribution per unit which is shown below:

Contribution per unit = Selling per unit - variable cost per unit

                                   = $190 per unit - $76 per unit

                                   =  $114 per unit

where,

The selling per unit = (Sales revenue ÷ number of units)

                                = ($190,000 ÷ 1,000 units)

                                = $190 per unit

The variable cost per unit = (variable cost ÷ number of units)

                                           = ($76,000 ÷ 1,000 units)

                                           = $76 per unit

Now the change in operating income equals to

= (increased sales units × contribution per unit) - advertising cost

= (300 units × $114 per unit) - $20,000

= $34,200 -$20,000

= $14,200 increase

7 0
4 years ago
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