A) For the Company ABC, if, in 2019, the Company’s total assets is $3,000,000, non-interest bearing current liability is $500,000, sales revenue is $5,000,000, profit ratio (net income/sales revenue) is 5%, and the Company’s sales revenue is expected to reach $6,000,000 in 2020 with same dividend payout ratio of 70% as 2019, what’s the Company’s Additional Funds Needed (AFN)?

B) The capital intensity ratio is measured as A0*/S0 (assets/revenue in the previous year, 2019). If this firm’s capital intensity ratio is increased from 60% to 80%, this firm is more capital intensive. In that case, what’s the firm’s AFN? Will the AFN be increased, compared with the case in 17-1 above, and why?

C) Given the data in 17-1, if the Company pays zero dividend, what’s the firm’s AFN? Comparing with 17-1, is the AFN going up or down? And why?

D)

a. Given the data for the Company XYZ in 2008 as below, if the sales is expected to grow 25% in 2009, and the operating cost is 70% of the sales revenue in 2009, other things being equal, what’s the dividend payout and addition to retained earnings (R/E) in 2009?

Year 2008 Sales $700 Operating costs 500 EBIT $200 Interest 40 EBT $160 Taxes (40%) 64 Net income $ 96 Dividends (33.33%) $ 32 Addit. to R/E $ 64 D2) What’s the percentage change in dividend payout from 2008 to 2009? E) If the Company ABC has the following data: Sales = $5,000,000,000; Fixed Asset (FA) = $1,700,000,000; and FA are operated at 90% capacity.

a. What’s the Company’s Full capacity sales?

b. What’s firm’s Target (full capacity) FA/S ratio?

c. If Sales increase by 12%; FA = ?

F) If the Company XYZ has the following data in 2008: Sales = $300,000,000; Growth rate of sales (gSales) = 12%; Inventory (Inv.) = $25 + 0.125 (Sales), what’s the projected inventory turnover (sales/inventory) in 2009?