Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Johnny's Hardware Store's sales were $523,000 during 2021, and its year-end assets were $435,000. For 2022, sales are expected to grow by 6%, and since
Johnny's Hardware Store's sales were $523,000 during 2021, and its year-end assets were $435,000. For 2022, sales are expected to grow by 6%, and since the firm is operating at full capacity, its assets must grow in proportion to sales. Its current liabilities consisted of $70,000 of accounts payable, $31,000 of notes payable, and $64,000 of accruals. Its after-tax profit margin is forecasted to be 16%, and the firm plans to pay out 45% of its earnings. Based on the AFN equation, what is the firm's additional funds needed (AFN) for 2022? (HINT: do notes payable spontaneously increase with sales? Show all work.) A. -$3,225 B. -$10,725 C. -$18,725 D. -$23,225 E. -$30,725
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started