Use the afn equation to forecast the additional funds

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Problem 1: Opal Corp's sales are expected to increase from $5 million in 2018 to $6 million in 2019, or by 20%. Its assets totaled $3 million a the end of 2018. Opal Corp is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2018, current liabilities are $1 million, consisting of $250,000 of account payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 3%, and the forecasted retention ratio is 30%. Use the AFN equation to forecast the additional funds Opal Corp will need for the coming year.

Reference no: EM132811774

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