Fuzzy Button Clothing Company reported sales of $720,000 at the end of last year, but this year, sales are expected to grow by 10%. Fuzzy Button expects to maintain its current profit margin of 23% and dividend payout ratio of 25%. The following information was taken from Fuzzy Buttons balance sheet: Total assets: $425,000 Accounts payable: $70,000 Notes payable: $40,000 Accrued liabilities: $80,000 Based on the AFN equation, the firms AFN for the current year is ______?

2.

Your boss has asked you to take a closer look at your companys credit policies. You have been given the following information:

Accounts receivable balance: $560,650

Average daily sales: $13,111

Weighted average cost of capital: 9%

Your firms days sales outstanding (DSO) is

3.

Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.

Last year's sales = S0 $300 Last year's accounts payable $50

Sales growth rate = g 40% Last year's notes payable $15

Last year's total assets = A0 * $500 Last year's accruals $20

Last year's profit margin = PM 20% Initial payout ratio 10%

New payout ratio 50%