Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?
| Last year's sales = S0 | $200,000 | | Last year's accounts payable | $60,000 |
| Sales growth rate = g | 20% | | Last year's notes payable | $15,000 |
| Last year's total assets = A0 | $117,500 | | Last year's accruals | $30,000 |
| Last year's profit margin = PM | 10.0% | | Target payout ratio | 15.0% |
2. Kamath-Meier Corporation's CFO uses this equation, which was developed by regressing inventories on sales over the past 5 years, to forecast inventory requirements: Inventories = $22.0 + 0.125(Sales). The company expects sales of $525.0 million during the current year, and it expects sales to grow by 40% next year. What is the inventory forecast for next year? All dollars are in millions.
3.Last year Wei Guan Inc. had $625 million of sales, and it had $270 million of fixed assets that were used at 65% of capacity. In millions, by how much could Wei Guan's sales increase before it is required to increase its fixed assets? Do not round intermediate calculations.
