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Please show the work, confused on some parts. Thank you! 9) Custom Tailor's co. generated sales of $4 million and net income of $250,000 in
Please show the work, confused on some parts. Thank you!
9) Custom Tailor's co. generated sales of $4 million and net income of $250,000 in 2016. It is expected that sales will increase by 12% in 2017. The company is operating at full capacity. The total assets at the end of 2016 included $500,000 in current assets and $1,250,000 in property, plant, and equipment. The company's current liabilities included $75,000 in notes payable, $100,000 in accrued liabilities, and $55,000 in accounts payable. The company expects to maintain its 2016 profit margin and its retention ratio of 40%. What is the company's AFN? a) $23400 b) $79400 c) $70400 d) ($70600) 10) Pool Party Design, has $3 million in sales and $800,000 in net fixed assets. The company's fixed assets are operating at 80% of capacity. If sales are expected to increase by 30% next year, by how much will fixed assets have to increase to meet its target fixed assets/sales ratio? a) $832000 b) $24000 c) $170667 d) $32000Step by Step Solution
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