6. Financial Planning and Forecasting: The AFN Equation: Introduction Whe determpine the future of forms' managers. fuanoal forecastne process is to determine the finanang requirements through the ANN ecuation. Audsienal funds needed are the amourt of casital (interest bearing The AfN equation is written as follows? Additional Projected Spastaseous focresse in funds no increse - increase in - retained needed, or AFN in assets liabllities earning AFN-(A0%/50)SS(Lo/SS)ASMSi(1Payout) rate is the mavomum achuevable grementh rate without the firm having to raise extemal funds. In other words, it is the gromth rate at which the firm's AFN equals zero. Quantitative Problem 1s Beasley Industries" wales are expected to increase from $5 milion in 2019 to $6 milion in 2020 , or by 20%. Its assets totaled $3 inilien at the end of 2019. Beasley is at ful capacty, so is assets must grow in proportion to projected sales, At the end of 2019 , aurrent babsities are $700,000, 00nestiny of $120,000 of accounts payable, $450,000 of notes payable, and $130,000 of acerued labsities. Its proft margin is forecasted to be 4%, and ts dividend poyout ratio is 60%. Using the AFN equation, forecast the additional funds Beaslev will need for the coming year. Do not round intermediate calculabiens. Round your answer to the nearest dollar. 5 fixed acsete, firct, the fam's management must find oot the firm's full cagacity sales as follows: Next, management would colculate the firm's target fixed astets ratio as follows: Tiru Iy, management wou'd usn the target fixed assets ratio with the projected sales to calculate the firm's fequired teyel of fixed assets as follonst Requiredleveloffixedassets=(Targetforedassets/5ales)Projectedsales Quantsative Problem 2: Mitchel Mandecturng Company has $1,500,000,000 in wales and $240,000,000 in foed assets. Currenty, the company's foxed assets are operating at 75% of cabacty. a. What level of salns could Michell have ebtained in a had been operating at full capaoty Do not round intermediate calculations, Roiand your answer to the nearest doll af. 1 b. What is titchels farget fixed assesssales ratio? Do not reund interwediate calculations, Round your answer to two decimal places. calculatians. Reund your answer to the nearest dollar, 4