Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help on all parts please Cold Duck Manufacturing Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Liabilities: Current Assets: Cash and

help on all parts please image text in transcribed
image text in transcribed
Cold Duck Manufacturing Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Liabilities: Current Assets: Cash and equivalents $150,000 Accounts payable Accrued liabilities $250,000 150,000 Accounts receivable 400,000 350,000 $900,000 Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Notes payable Total Current Liabilities Long-Term Bonds Total Debt 100,000 $500,000 1,000,000 $1,500,000 $2,100,000 Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity 800,000 700,000 $1,500,000 $3,000,000 Total Assets $3,000,000 The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, Cold Duck Manufacturing generated $300,000 net income on sales of $14,000,000. The firm expects sales to increase by 15% this coming year and also expects to maintain its long-run dividend payout ratio of 40%. Suppose Cold Duck's assets are fully utilized. Using the additional funds needed (AFN) equation to determine the increase in total assets that is necessary to support a firm's expected sales, it is projected that Cold Duck will require In additional assets. When a firm grows, some liabilities grow spontaneously along with sales. Spontaneous $540,000 a source of capital that the firm will generate Internally, so they reduce the need for external capital. How much of the total increase $360,000 be supplied by spontaneous liabilities for Cold Duck this year? $405,000 $48,000 $450,000 Suppose Cold Duck's assets are fully utilized. Using the additional funds needed (AFN) equation to determine the increase in total assets that is necessary to support a firm's expected sales, it is projected that Cold Duck will require In additional assets. When a firm grows, some liabilities grow spontaneously along with sales. Spontaneous liabilities are a source of capital that the firm will generate internally, so they reduce the need for external capital. How much of the total increase in assets will be supplied by spontaneous liabilities for Cold Duck this year? $48,000 $60,000 $72,000 $54,000 In addition, Cold Duck Manufacturing is expected to generate net income this year. The firm will pay out some of its earnings as dividends but will retain the rest for future asset investment. Again, the more a firm generates internally from its operations, the less it will have to raise externally from the capital markets. Assume that the firm's profit margin and dividend payout ratio are expected to remain constant. from operations that will be added to its existing retained Given the preceding information, Cold Duck expects to generates earnings. (Be sure to round your answer to the nearest whole dollar) According to the AFN equation and projections for Cold Duck Manufacturing, the firm's AFN is

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

Marketing Research

Authors: Alvin C. Burns, Ronald F. Bush, Ann F. Veeck

8th Global Edition

1292153261, 9781292153261

Students also viewed these Finance questions

Question

=+a) Is this an experimental or observational study? Explain.

Answered: 1 week ago