Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Broussard Skateboard's sales are expected to increase by 25% from $7.2 million in 2019 to $9.00 million in 2020. Its assets totaled $2 million at

image text in transcribed Broussard Skateboard's sales are expected to increase by 25% from $7.2 million in 2019 to $9.00 million in 2020. Its assets totaled $2 million at the end of 2019 . Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019 , current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 60%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations Of Financial Management

Authors: Stanley Block

8th Canadian Edition

0070965447, 9780070965447

More Books

Students also viewed these Finance questions

Question

=+b) Obtain a forecast for the week of May 28, 2007.

Answered: 1 week ago