Question

NEED ANSWER ASAP / ANSWER NEVER USED BEFORE

a.)  

Daniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the company's operations next year, and he wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. 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	$50
Last year's total assets = A0*	$870	Last year's accruals	$30
Last year's profit margin = PM	5%	Target payout ratio	60%

Select the correct answer.

a. $227.6

b. $234.2

c. $230.9

d. $224.3

e. $237.5 b.) In your internship with Lewis, Lee, & Taylor Inc. you have been asked to forecast the firm's additional funds needed (AFN) for next year. The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Last year's sales = S0 $200,000 Last year's accounts payable $50,000 Sales growth rate = g 40% Last year's notes payable $15,000 Last year's total assets = A0* $152,500 Last year's accruals $20,000 Last year's profit margin = PM 20.0% Target payout ratio 25.0% Select the correct answer. a. - $9,060 b. - $9,040 c. - $9,020 d. - $9,000 e. - $8,980 c.) You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, & Worthington (HHW), which is planning its operation for the coming year. The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 20%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions. Last year's sales = S0 $300.0 Last year's accounts payable $50.0 Sales growth rate = g 40% Last year's notes payable $15.0 Last year's total assets = A0* $500 Last year's accruals $20.0 Last year's profit margin = PM 20.0% Initial payout ratio 10.0% Select the correct answer. a. $6.8 b. $11.6 c. $8.4 d. $13.2 e. $10.0

d.)

Last year Baron Enterprises had $400 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity last year. In millions, by how much could Baron's sales increase before it is required to increase its fixed assets?

Select the correct answer.

a. $209.4

b. $227.4

c. $221.4

d. $233.4

e. $215.4

Answer 1

Comlin Answer Additional fund needed (AFN) - Ingraze in used Increase in tabelit Increase in Retuned @ In Qrave in Assets ; last year Asset x Sale sroun P Rate : $870 M X 30%. - $ 261 millions Increase in la... Last year la. x sale rowth - rate - $ 70m. X 304 - 2 Increase in Retained earring = Current year Sule x profit marsin x Retention Rate $ 350 X (1+30% X 5%. X 4Oy = = $9.4 millions AFN : Inqease in Asset. Increase in lia. - Increase in Retained earning AFN LAN - 9241 - 21 - 9.1 - 4 2 30.9 million) (s)

Note : - Liability for the last year includes: o last year account payable $40 © last year Accruals । $ 30 Tatal lia. $70 ® liability includes short term liability for the year. . short term liabilite is required for Additional fund calculation. © Note Payable are the roan from bank of financial institution represts long-term liability and not included in AF calculation. © Retention Rate =(- Payout ratio )

fund needed a (6) AFN (Additional + Increase in Assets = $ 152.500 X Uon = $ G1,000 * In crease in Liability = 4. 70.000 x 10ya 2 $ 28,000 * Increase in Retaried earning - - $ 2 CuODO XloV X 205 x 75 = $ 42,000 | AFNE | 961000 - 28000 - 42000 AFN -$-9000 [d] Nate i- current year sale = last year salet - last year sale x sale growth- - rate = $2,00.000 + [ 2000doxuo,.] - $ 2,00,000 + 80,000 = $ 280,000 Capplicable to a, b, c,

1) cave of AFN ( tratulation of 10% : for Intial Payout ratio - Increase in asset = $ 500 x 2,or. $ 200 + In Welase in habilly : 470 * 407 = $.28 M. * Inceare in Retained earrenga = = - 300 x[1+ 40%.] x 20%. x [-107.) $420 x 20%•* 907. $75.6 AFN = [ 8.200 - 428-75.6] = $ 96.4 millions 2) calculation of 207, :: AFN for change payout raho - Increase in asset = $200 * Increase in lia. = $ 28 * Increase in Retained earning = = $420 x 2017. x St-2010 ] 5 420 X 20 X 807. = $67.2 AFN $28- $67.23 / $ 200 $100.8

change in Afn for coming coung yе в фенні - year fn SAFN Fox 20%. Panout st for 107. payout جمله = $ lovog - $ 86.4 = 48.4 million co] Last year sale = $ 100 million fireed asset = $270 million Production capacity = 65% Calculation of to increase its for or to required increase in sale fiseed asset $ 400 x $ 270 $175.5 615-4 (approxe) - million sale at 100% Production capacity us = $615ill million * sale at 65% Production capacity = $wo million chanze in sale = 4 Gisou - suvo $ 215. 41

ad To Increase Enterprises required at 100% capacity: its fixed asset Baron to use its fireed asset Jate: 65% Production 0 Value of fireed asset used at capacity - $270 million x 65) - &175.5 million 0 sale 16 at est capacity is buvo then in capacity it will be : $ voo x 100 % 65% = $615. U million.