ABC Co. is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm's additional funds needed (AFN) . Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S₀
$350
Last year's accounts payable
$40
Sales growth rate = g
30%
Last year's notes payable (to bank)
$50
Last year's total assets = A₀
$500
Last year's accruals
$30
Last year's profit margin = M
5%
Target payout ratio
60%

Question

Quizplus · Accepted Answer

The Answer of ABC Co. is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S₀ $350 Last year's accounts payable $40 Sales growth rate = g 30% Last year's notes payable (to bank) $50 Last year's total assets = A₀ $500 Last year's accruals $30 Last year's profit margin = M 5% Target payout ratio 60% A) $102.8 B) $108.2 C) $113.9 D) $119.9

ABC Co Is Planning Its Operations for Next Year, and Ronnie