Use the afn equation to forecast the additional funds

Assignment Help Financial Management
Reference no: EM13769237

AFN equation

Carter Corporation's sales are expected to increase from $5 million in 2012 to $6 million in 2013, or by 20%. Its assets totalled $4 million at the end of 2012. Carter is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2012, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 6%, and the forecasted retention ratio is 40%. Use the AFN equation to forecast the additional funds Carter will need for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent.

$

Reference no: EM13769237

Questions Cloud

Comparing the relative position of multiple offerings : This is a simple but effective visual mechanism for comparing the relative position of multiple offerings from competing sources.
Case analysis - google : Write a summary of the case study. In your paper explain how Google analyzed their value chain for the purpose of determining where they were able to create value when using their resources, capabiltites and core competencies.
Market making-trading and mergers and acquisitions : Among the key activity areas for securities firms are Investment Banking, Market Making, Trading and Mergers and Acquisitions. Briefly explain each of these areas and describe the major risks for each area. Explain what hedge funds are and how are th..
What are the major ethical issues in this case : What are the major ethical issues in this case? What laws, if any, are applicable to the decision? How should the ethics committee render a decision in this case
Use the afn equation to forecast the additional funds : Carter Corporation's sales are expected to increase from $5 million in 2012 to $6 million in 2013, or by 20%. Its assets totalled $4 million at the end of 2012. Carter is at full capacity, so its assets must grow in proportion to projected sales. At ..
Different types of value in the valuation process : What types of value would you consider when assigning "value" to a firm's stock or bond? What is the significance of each of the different types of value in the valuation process? Use examples to support your response.
Essential elements of an enforceable contract : Define the five essential elements of an enforceable contract, and demonstrate how each element relates to your example
Explain how google analyzed their value chain : Write a summary of the case study - In your paper explain how Google analyzed their value chain for the purpose of determining where they were able to create value when using their resources, capabiltites and core competencies.
Difference between an express and an implied contract : What is the difference between an express and an implied contract? What elements must be in place for formation of a contract

Reviews

Write a Review

 

Financial Management Questions & Answers

  Define moderately strenuous job responsibilities

If I purchase a policy that pays a fixed benefit of 90% of my current salary, how long will it be before this amount covers only 70% of my future salary if I assume salary increases of 4% per year?

  Explain the accounting information for financial management

Write a 700- to 1,000-word paper identifying the specific cost accounting system an organization utilizes and how it uses the accounting information for financial management. Your paper must include the following

  Discuss the different roles of financial institutions

Discuss the different roles of financial institutions in the economy in general. Also, discuss the current regulations in the financial services industry

  Composite indicator versus using simple individual indicator

What is the advantage of using a composite indicator versus using a simple individual indicator? Please be clear and provide examples

  What is the companys inventory turnover ratio

Company has sales of $831,000, a gross profit margin of 0.334, and inventory of $171,000. What is the company's inventory turnover ratio?

  Implied price volatility of the underlying stock price

A six-month Twitter call option with an exercise price of $50.00 was traded at $4.25 per option on February 27, 2015. Assume that the risk free rate was 1.2% per year and stock price for Twitter on February 27, 2015 was $48.08. Twitter Inc. does not ..

  What is the fair price of megadebt stock

MegaDebt Corp. just issued a dividend of $0.85. The firm pays quarterly dividends. The dividends are expected to grow at 0.2 percent each quarter. The shareholders ask for a return of 5.25 percent each year. What is the fair price of MegaDebt stock? ..

  Barbara is considering investing in a stock and is aware

Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing.

  Stock to finance this market-development strategy

Let’s say McDonalds needs to raise $1 billion to expand into Africa. Determine whether McDonalds should have used all debt, all stock, or a 50/50 combination of debt and stock to finance this market-development strategy. Assume a 38 percent tax rate,..

  What is the premium to par

If the a bond is quoted at a price of 109.385 on February 1, 2008 that pays a coupon of 8% and matures in 9 years, what is the premium to par?

  What is the portfolio weight for each stock

Stock J has a beta of 1.3 and an expected return of 13.66 percent, while Stock K has a beta of 0.85 and an expected return of 10.6 percent. You want a portfolio with the same risk as the market.

  Impression on investors and creditors

Prepare an income statement, balance sheet, and statement of cash flows under each of the two options and identify the option that results in financial statements that are more likely to leave a favorable impression on investors and creditors.

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