4. More on the AFN (Additional Funds Needed) equation Bohemian Manufacturing Company reported sales of $743,000 at the end of last year; but this year, sales are expected to grow by 8%. BMC expects to maintain its current profit margin of 23% and dividend payout ratio of 20%. The firm's total assets equaled $425,000 and were operated at full capacity. BMC's balance sheet shows the following current liabilities: accounts payable of $75,000, notes payable of $30,000, and accrued liabilities of $65,000. Based on the AFN (Additional Funds Needed) equation, what is the firm's AFN for the coming year? 0 -$137,334 -$156,061 -$149,819 0 -$124,849 A negatively-signed AFN value represents: O A surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends O A shortage of internally generated funds that must be raised outside the company to finance the company's forecasted future growth A point at which the funds generated within the firm equal the demands for funds to finance the firm's future expected sales requirements Because of its excess funds, Bohemian Manufacturing Company is thinking about raising its dividend payout ratio to satisfy shareholders. BMC could pay out of its earnings to shareholders without needing to raise any external capital. (Hint: What can BMC increase its dividend payout ratio to before the AFN becomes positive?) capacity. BMC's balance sheet shows the following current liabilities: accounts payable of $75,000, notes payable of $30,000, and accrued liabilities of $65,000. Based on the AFN (Additional Funds Needed) equation, what is the firm's AFN for the coming year? 0 -$137,334 -$156,061 -$149,819 -$ 124,849 A negatively-signed AFN value represents: O A surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends 87.6 rtage of internally generated funds that must be raised outside the company to finance the company's forecasted future growth (61.3 ht at which the funds generated within the firm equal the demands for funds to finance the firm's future expected sales 65.7 fements 70.1 Because cess funds, Bohemian Manufacturing Company is thinking about raising its dividend payout ratio to satisfy shareholders. BMC could pay out of its earnings to shareholders without needing to raise any external capital. (Hint: What can BMC increase its dividend payout ratio to before the AFN becomes positive?) Grade It Now Save & Continue Continue without saving
