Period VariablesCurrentProjectedCurrentProjectedCurrentProjectedSales$100,000$12 Period VariablesCurrentProjectedCurrentProjectedCurrentProjectedSales$100,000$120,000AssetsLiab.&Own -ers’ Equ.Cost$ 75,000Short Term$60,000Debt$40,000Net IncomeLong Term$20,000Equity$40,000As we said in class all models are...

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Accounting

     Period
Variables
Current
Projected
Current
Projected
Current
Projected
Sales
$100,000
$120,000
Assets
Liab.&Own -ers’ Equ.
Cost
$ 75,000
Short Term
$60,000
Debt
$40,000
Net Income
Long Term
$20,000
Equity
$40,000
As we said in class all models are built on assumptions:
1     Dividend payout ratio is 50%therefore, the retention rate is the remainder
2      All assets and noninterestbearing liabilities vary is the same proportion as sales
3       Use the following equationto find the additional funding needed (AFN):
.
REQUIRED:
Find the AFN using the model equationabove
2      Fill in the blanks inthe table above.
3.     Write a paragraph on findingsor conclusion after your perform the algorithmicmodelling

Answer & Explanation Solved by verified expert

4.5 Ratings (611 Votes)

Part 1 Sales revenue 100000 Less Cost 75000 Net income 25000 Projected sales 120000 Less Current sales 100000 Increase in sales 20000 Divided by Current sales 100000 increase in sales 20 Sales revenue 120000 See Answer

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Transcribed Image Text

In: Accounting Period VariablesCurrentProjectedCurrentProjectedCurrentProjectedSales$100,000$12 Period VariablesCurrentProjectedCurrentProjectedCurrentProjectedSales$100,000$120,000AssetsLiab.&Own -ers’ Equ.Cost$ 75,000Short Term$60,000Debt$40,000Net IncomeLong Term$20,000Equity$40,000As we said in class all models are built on assumptions:1 Dividend payout ratio is 50%therefore, the retention rate is the remainder2 All assets and noninterestbearing liabilities vary is the same proportion as sales3 Use the following equationto find the additional funding needed (AFN):.REQUIRED:Find the AFN using the model equationabove2 Fill in the blanks inthe table above.3. Write a paragraph on findingsor conclusion after your perform the algorithmicmodelling

Period Variables	Current	Projected		Current	Projected		Current	Projected
Sales	$100,000	$120,000	Assets			Liab.&Own -ers’ Equ.
Cost	$ 75,000		Short Term	$60,000		Debt	$40,000
Net Income			Long Term	$20,000		Equity	$40,000