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Suppose Green Moose Company's assets are fully utilized. Use the additional funds needed ( AFN ) equation to determine the increase in total assets that
Suppose Green Moose Company's assets are fully utilized. Use the additional funds needed AFN equation to determine the increase in total assets
that is necessary to support Green Moose Company's expected sales. Note: Do not round intermediate calculations.
$
$
$
$
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 Green
Moose Company this year? Note: Do not round intermediate calculations.
$
$
$
$
In addition, Green Moose Company 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.
Given the preceding information, Green Moose Company is expected to generate $
from operations that will be added to retained
earnings. Note: Do not round intermediate calculations.
According to the AFN equation and projections for Green Moose Company, the firm's AFN is $
Note: Do not round intermediate
calculations.The Additional Funds Needed AFN equation
Green Moose Company has the following endofyear balance sheet:
Green Moose Company Balance Sheet For the Year Ended on December
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,
expects to maintain its longrun dividend payout ratio of
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