How much additional funds will be required

Assignment Help Corporate Finance
Reference no: EM13196452

A firm has the following balance sheet:

            Cash                          $  200     Accounts payable               $ 200

            Accounts receivable      200     Notes payable                       400

            Inventory                       200      Long-term debt                    800

            Fixed assets                1,800     Common stock                      800

                                                             Retained earnings                  200

            Total assets              $2,400     Total liabilities & Equity  $2,400

 

Sales for the year just ended were $6,000, and fixed assets were used at 80 percent of capacity.  Current assets and accounts payable vary directly with sales.  Sales are expected to grow by 20 percent next year, the expected net profit margin is 5 percent, and the dividend payout ratio is 80 percent.

How much additional funds (AFN) will be needed next year, if any?

Reference no: EM13196452

Questions Cloud

State the equilibrium constant for a chemical transformation : the equilibrium constant for a chemical transformation can be predicted from its stoichiometric coefficients whereas the rate law must be determined experimentally.
What is the length of the firms cash conversion cycle : What is the length of the firm's cash conversion cycle and what is the firm's investment in accounts receivable?
Opportunity for promotion : Roger works at the only departmental store in a small town. He has been working there for over 5 years and has received raises and bonuses. As there are three employees working in the store, including the manager, there is no opportunity for a promot..
Find the shortest length of wire needed : A 105 ft tower is located on the side of a mountain that is inclined 32° to the horizontal. A guy wire is to be attached to the top of the tower and anchored at a point 55 ft downhill from the base of the tower. Find the shortest length of wire ne..
How much additional funds will be required : Current assets and accounts payable vary directly with sales.  Sales are expected to grow by 20 percent next year, the expected net profit margin is 5 percent, and the dividend payout ratio is 80 percent.
What is the minimum thickness of a lead slab : Lead has a Half-Value Layer (HVL) of 0.3mm for 140 KeV X-rays. What is the minimum thickness of a lead slab to reduce the incident energy to less than 1%?
Geographical distribution of population : A questionInformation on the geographical distribution of population is commonly provided as an attribute of discrete polygonal aerial units, such as the Enumeration Districts used in many national censuses.
What is the temperature of the coffee after 16 minutes : What is the temperature of the coffee after 16 minutes?
Find both the width of the square dining room : an architect has allocated a rectangular space of 429 sq ft for a square dining room and a 20 ft wide kitchen. Find both the width of the square dining room and the length of the entire rectangular space

Reviews

Write a Review

Corporate Finance Questions & Answers

  Effect of leverage on creditors and share holders

Effect of leverage on creditors and share holders - As the firm levers up, how does the increase in value get apportioned between the creditors and the shareholders?

  Would you buy the bond

A ZERO COUPON BOND with $100 face value is redeemable at par in exactly four years. You see from financial times that you can currently buy IT FOR $68.3.

  Calculation of standard deviation

The following are the historic returns for Chelle Computer Corporation. Determine the correlation coefficient between Chelle Computer and General Index and also calculate the standard deviation.

  International banking facilities

How do International banking facilities contribute to interdependence between economies & financial markets, & to global financial stability.

  Determine which project should company accept

A corporation estimates that an average-risk project has a cost of capital of 8%, a below-average risk project has a cost of capital of 6%, & an average risk project has a cost of capital of 10%.

  Classification of expenses

Where would you most likely discover each of the given expenses listed: Physical Therapy, Administration, Nursing, or Maintenance?

  What is the difference between earned revenue and unearned

What is the difference between earned revenue and unearned revenue? How are they recorded differently?

  Evaluation of stock price and stock

Calculation of stock price and stock to be allotted with given data - c. How many shares of common stock must be issued at the value computed in part b to eliminate the deficit computed in part a?

  Financial statements: financial planning and growth

Financial Statements; Financial Planning and Growth; Time Value of Money

  Determine expected and required return

Assume Rf is 5% and Rm is 10 percent. According to the SML and the CAPM, an asset with a beta of -2.0 has a required return of negative 5 percent.

  Find the coupon rate and the current yield

Find the coupon rate and the current yield and what is the current value of each of these bonds if the yield to maturity is 6.8 percent?

  Evaluating the capital investment project

What types of decisions would need to be made before the investment is made? Indicate the main kinds of information required to estimate this capital investment project.

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