Question
If sales were projected to INCREASE 5% in 2017, the company was using its fixed assets at only 75% capacity, and the firm plans to
If sales were projected to INCREASE 5% in 2017, the company was using its fixed assets at only 75% capacity, and the firm plans to pay out 45% of net income as a dividend, answer these questions:
1. What is the value of A* (assets that are a function of sales)?
2. What is the change in retained earnings in 2017 (use the formula, not pro forma statements)
3. What is the value for spontaneous libilities (L* x %change in sales)?
4. Use the formula to calculate the AFN for 2017.
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Intermediate Financial Theory
Authors: Jean-Pierre Danthine, John B. Donaldson
3rd Edition
0123865492, 9780123865496
