Broussard Skateboard's sales are expected to increase by 20% from $9.0 million in 2016 to $10.80...

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Broussard Skateboard's sales are expected to increase by 20%from $9.0 million in 2016 to $10.80 million in 2017. Its assetstotaled $5 million at the end of 2016. Broussard is already at fullcapacity, so its assets must grow at the same rate as projectedsales. At the end of 2016, current liabilities were $1.4 million,consisting of $450,000 of accounts payable, $500,000 of notespayable, and $450,000 of accruals. The after-tax profit margin isforecasted to be 5%. Assume that the company pays no dividends.Under these assumptions, what would be the additional funds neededfor the coming year? Do not round intermediate calculations. Roundyour answer to the nearest dollar.

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3.7 Ratings (511 Votes)

Additional Funds Needed AFN for the coming year Expected Next Year Sales 10800000 After Tax profit Margin After Tax profit Margin Expected Next Year Sales x Profit Margin See Answer

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Broussard Skateboard's sales are expected to increase by 20%from $9.0 million in 2016 to $10.80 million in 2017. Its assetstotaled $5 million at the end of 2016. Broussard is already at fullcapacity, so its assets must grow at the same rate as projectedsales. At the end of 2016, current liabilities were $1.4 million,consisting of $450,000 of accounts payable, $500,000 of notespayable, and $450,000 of accruals. The after-tax profit margin isforecasted to be 5%. Assume that the company pays no dividends.Under these assumptions, what would be the additional funds neededfor the coming year? Do not round intermediate calculations. Roundyour answer to the nearest dollar.