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Problem 12-02 AFN equation Broussard Skateboard's sales are expected to increase by 15% from $7.0 million...

Problem 12-02 AFN equation Broussard Skateboard's sales are expected to increase by 15% from $7.0 million in 2016 to $8.05 million in 2017. Its assets totaled $6 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, 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 7%, and the forecasted payout ratio is 55%. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to the nearest dollar. $ Assume that an otherwise identical firm had $7 million in total assets at the end of 2016. Broussard's capital intensity ratio (A0*/S0) is than the otherwise identical firm; therefore, Broussard is capital intensive - it would require increase in total assets to support the increase in sales.

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Home nert Page Layout Formulas Data Review View dd-Ins as Cut Σ AutoSum ー E ゴWrap Text copy ▼ в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 Conditional Format eCell Insert Delete Format Sort &Find & 2 ClearFe Select Editing Format Painter Formatting, as Table w styles. ▼ ㆆ ▼ Clipboard Alignment Number Cells 653 INCREASE IN SALES (%)-15% 654 PROFIT MARGIN = 7% 655 656 657 658 659 660 661 662 663 664 665 DIVIDEND PAYOUT-55% RETENTION RATIO = 45% 1 INCREASE IN ASSETS NECESSARY TO SUPPORT INCREASE IN SALES INCREASE IN SALES X TOTAL ASSETS 15% X 6000000 2 INCREASE IN LIABILITIES NECESSARY TO SUPPORT INCREASE IN SALES INCREASE IN SALES X TOTAL ASSETS ACCOUNTS PAYABLE ACCRUED LAIBILITIES +OTHER PAYABLES 1596 X 900000 135000 3 PROFIT MARGIN = 7% NET INCOME SO ADDITION TO RETAINED EARNINGS = 45% 563500 253575 8050000X 7% 4 AFN = INCREASE IN ASSETS-INCREASE IN LABILTIES-INCREASE IN RETAINED EARNINGS AFN 1-2-3 511425 667 ANS 668 669 670 671 BROUSSARDS CAPITAL INTENSITY RATIO IS LOWER THAN OTHERWISE IDENTICAL FIRM THEREFORE BROUSSARD IS LESS CAPITAL INTENSIVE IT WOULD REQUIRE SMALLER INCREASE IN TOTAL ASSETS /4 , 커 | YIELD SPOT Sheet2 AFN , BANKING , NOTE BIDDING, UNDERWRITING EUAC AwpM LIFE / LP, İP, MRP. INFLATION YIELD WARRAN Trefund bond CLEAN INVOICE PRICE erences: GC185 福 130% 03:50 31-01-2019

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