1. Daniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the companys operations next year and he wants you to forecast the firms 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 years sales = S0 $350 Last years accounts payable $40

Sales growth rate = g 30% Last years notes payable $50

Last years total assets = A0* $500 Last years accruals $30

Last years profit margin = PM 5% Target payout ratio 60%

2. David Rose Inc. forecasts a capital budget of $500,000 next year with forecasted net income of $400,000. The company wants to maintain a target capital structure of 30% debt and 70% equity. If the company follows the residual dividend policy, how much in dividends, if any, will it pay?

3. Larsen Films is analyzing its cost structure. Its fixed operating costs are $470,000, its variable costs of $2.80 per unit produced, and its products sell for $4.00 per unit. What is the companys breakeven point, i.e., at what unit sales volume would income equal costs?

4. A venture capital investment group received a proposal from Wireless Solutions to produce a new smart phone. The variable cost per unit is estimated at $250, the sales price would be set at twice the VC/unit, fixed costs are estimated at $750,000, and the investors will put up the funds if the project is likely to have an operating income of $500,000 or more. What sales volume would be required in order to meet this profit goal.

Last years sales = S0 $350 Last years accounts payable $40

Sales growth rate = g 30% Last years notes payable $50

Last years total assets = A0* $500 Last years accruals $30

Last years profit margin = PM 5% Target payout ratio 60%

1. 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* $500 Last year's accruals $30 Last year's profit margin = PM 5% Target payout ratio 60% 2. David Rose Inc. forecasts a capital budget of $500,000 next year with forecasted net income of $400,000. The company wants to maintain a target capital structure of 30% debt and 70% equity. If the company follows the residual dividend policy, how much in dividends, if any, will it pay? 3. Larsen Films' is analyzing its cost structure. Its fixed operating costs are $470,000, its variable costs of $2.80 per unit produced, and its products sell for $4.00 per unit. What is the company's breakeven point, i.e., at what unit sales volume would income equal costs? 4. A venture capital investment group received a proposal from Wireless Solutions to produce a new smart phone. The variable cost per unit is estimated at $250, the sales price would be set at twice the VC/unit, fixed costs are estimated at $750,000, and the investors will put up the funds if the project is likely to have an operating income of $500,000 or more. What sales volume would be required in order to meet this profit goal