Calculate afn, when the company utilizes 100 % of capacity

Assignment Help Finance Basics
Reference no: EM13153629

Pep Bottle's December 31st balance sheet is given below:

Cash $ 10 Accounts payable $ 15
Accounts receivable 25 Notes payable 20
Inventory 40 Accrued wages and taxes 15
Net fixed assets 75 Long-term debt 30
Common equity 70
Total liabilities
Total assets $150 and equity $150

Sales during the past year were $100, and they are expected to rise by 50 percent to $150 during next year. Also, during last year fixed assets were being utilized to only 85 percent of capacity, so company could have supported $100 of sales with fixed assets that were only 85 percent of last year's actual fixed assets. Assume that Pep Bottle's profit margin will remain constant at 5 percent and that the company will continue to pay out 60 percent of its earnings as dividends. To the nearest whole dollar, what amount of nonspontaneous, additional funds (AFN) will be needed during the next year (10 points)?

a. Calculate AFN, when the company utilizes 100 % of capacity.
b. Calculate AFN, when the company utilizes 85% of capacity. 

Reference no: EM13153629

Previous Q& A

  A small convenience store

A small convenience store normally has one employee attending to the cash register. The average time between customer arrivals at the store is 5 minutes.

  Why the machine has been depreciated using the straight line

Why the machine has been depreciated using the straight line method, while the building has been depreciated using the diminishing method. Shouldn't both be depreciated using diminishing?

  Joe''s car company

Joe's Car Company can make its own engines for $1050 or buy them from the outside from a defunct Yugoslavian auto plant for $1000 per engine. Inventory holding cost is $800 per engine per year, and the cost of ordering, receiving etc. is $8000 per or..

  Relationship between space and geography

What is the relationship between space, geography, and identity in Aritha van Herk's "Calgary is a Growing Graveyard"? I have to write an essay on this, can someone help? I've read the poem, but honestly it just confused me! Any ideas where I can beg..

  One way to empower buyer and seller

Procurement." One way to empower buyer and seller organizations to approve all project transactions is to include a caveat that lawyers from both sides must agree on a set of terms and conditions.

  What has been the trend in mergers and acquisitions in years

What has been the trend in mergers and acquisitions in recent years? Up, down? What are some of the explanations? Is there evidence that the trend may change? The paper can be 800-100 words.

  Alex''s goal would have been the same

Determine if Alex's goal would have been the same in light of these new tools.3.Discuss what Alex would bring to the challenges he faced that is absent in the Goldratt & Cox text.

  Essay development-comparing and contrasting

Which of these topics would make good comparison-and-contrast essays? Why? Explain in one sentence.  men and women,  why you do (or don't) want to marry,  movies and “chick flicks”,  how to paint a room,  two kinds of ethnic food

  Eoq increase or decrease if estimates of setup

Does the EOQ increase or decrease if estimates of setup (order) costs include fixed, semi-variable, and pure variable costs while inventory-holding costs include only pure variable costs? Vice versa? What are the implications? Explain.

  Essay opposing home schooling

Write a short essay opposing home schooling. Start with a debatable thesis statement. Include a paragraph acknowledging opposing views.


Write a Review


Similar Q& A

  Illustrate what percentage increase in the money supply

If the objective is to keep the price level the same next yr illustrate what percentage increase in the money supply should the central bank plan

  Quality of business environment in host country

How can government policies impact the quality of the business environment in the host country? You are a foreign investor. What are your main concerns regarding the investment opportunities?

  Questions related to bond basics

Multiple choice questions using bond basics - Which of the following bonds is secured by a lien on real property?

  Construct a bond amortization table

Watson Bottle Corporation sold $400,000 in long-term bonds for $351,040. The bonds will mature in ten years and have a stated interest rate of 8% and a yield rate of 10 percent.

  Determining the cost of interest payment

ABC Inc. has CAD20,000,000 interest payment due on September 19th and is concerned about the possible CAD appreciation. Find out the USD cost of interest payment for ABC Inc?

  Annuity question on grandma and rock solid life insurance

Your grandmother bought annuity from Rock Solid Life Insurance Co. for $200,000 if she retired. In exchange for  $200,000, Rock Solid will pay her $25,000 per year till she dies.

  Problem on stock valuation

Assume Toyota has nonmaturing preferred stock outstanding that pays a $1.00 quarterly dividend and has a required return of 12% APR. Determine the stock worth?

  Foreign corporate tax rate

Assume England raised its corporate tax rate by 1 percentage point from 40% to 41%. How would this raise affect the economics of U.S.-U.K. foreign expansion project?

  Conditions favor the use of long-term debt

When a number of optional methods of long-term financing are under considerations; determine what conditions favor the use of long-term debt?

  Determine annual effective rate earned on investments

A Corporation invests $1,000,000 at the beginning of the year. It adds another $250,000 at the end of 1st quarter, withdraws $350,000 at the end of second quarter,

  Dividend policies-industry debt financing of exxon and bp

Research at least one (2) firm who have been paying dividends. This information can be found on any reputable financial website.

  Determine expect value for future stock

The current price of stock corp stock is $26.50 each share. Earnings next year should be $2 per share and it should pay a $1 dividend.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd