Question
The CFO of McDonald's has created a pro forma balance sheet for the next fiscal year. Sales are projected to grow by 15 percent to
The CFO of McDonald's has created a pro forma balance sheet for the next fiscal year. Sales are projected to grow by 15 percent to $602 million. Current assets, fixed assets, and short-term debt are 22 percent, 65 percent, and 15 percent of sales, respectively. McDonald's pays out 30 percent of its net income in dividends. The company currently has $180 million of long-term debt and $140 million in common stock par value. The profit margin is 12 percent. Based on the CFO s sales growth forecast, how much does McDonald's need in external funds for the upcoming fiscal year? (Hint: you need to construct the balance sheet this year and determine the accumulated retained earnings before constructing the proforma balance sheets to determine the EFN)
$5.97 million
$5.78 million
$5.36 million
$5.12 million
$4.83 million
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