Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants...

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Finance

Chua Chang & Wu Inc. is planning its operations for nextyear, and the CEO wants you to forecast the firm's additional fundsneeded (AFN). Data for use in your forecast are shown below. Basedon 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^*
$127,500
Last year's accruals
$20,000
Last year's profit margin = PM
20.0%
Target payout ratio
25.0%
â€‹
a.
-$14,820
b.
-$19,000
c.
-$20,520
d.
-$23,180
e.
-$21,280

Answer & Explanation Solved by verified expert

4.5 Ratings (812 Votes)

Answer is 19000 Last Year Sales 200000 Total Assets 127500 Spontaneous Current Liabilities Accounts Payable Accruals Spontaneous Current Liabilities 50000 20000 See Answer

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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^*	$127,500	Last year's accruals	$20,000
Last year's profit margin = PM	20.0%	Target payout ratio	25.0%