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

  What are fixed costs

At an output level of 17,000 units, you have calculated that the degree of operating leverage is 2.00. The operating cash flow is $33,800 in this case. What are fixed costs? What will the operating cash flow be if output rises to 18,000 units?

  Find the amount of the coupon

For a certain period a bond amortization schedule shows that the amount for amortization of premium is $5 and that the required interest is 75% of the coupon. Find the amount of the coupon.

  Record entries and build the financial statements

Create a chart of T-Accounts and post each journal entry to the appropriate accounts.

  From the attached list choose an institution for your final

from the attached list choose an institution for your final project that has not yet been chosen by a classmate check

  Determine amount available for distribution to all claimants

Duchon Industries had the following balance sheet at the time it defaulted on its interest payments and filed for liquidation under Chapter 7. Sale of the fixed assets, which were pledged as collateral to the mortgage bondholders, brought in $900 mil..

  Globalisation of the international ?financial markets

Examining the important factors that driving globalisation of the international ?financial markets and providing an analytical description of one or more financial crises that have occurred ?in the world's economy

  What is the cost of preferred stock financing

(Cost of preferred stock) The preferred stock of Gator Industries sells for $38.08 and pays $2.71 per year in dividends. What is the cost of preferred stock financing? If Gator were to issue 525,000 more preferred shares just like the ones it current..

  Value of a bond in relation to annual discounting

What effect does the use of semi-annual discounting have on the value of a bond in relation to annual discounting?

  Relationship between leverage and capital structure

If we incorporate Financial Distress and Bankruptcy Costs and also Taxes, then we have altered the fundamental assumptions of Modigliani and Miller. Explain the relationship between leverage and capital structure under the new assumptions.

  What is the book value of the equipment

The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $300,000. What is the book value of the equipment?

  Estimate the bottom-up levered beta for rad

RAD has 916.18 million shares outstanding today, trading at $6.67 per share. Assuming that the book value of debt on its books, which is $5.904 billion, is equal to market value (of debt), estimate the bottom-up levered beta for RAD. The firm has a m..

  What is the value of the firm

The Montana Hills Co. has expected earnings before interest and taxes of $8,100, an unlevered cost of capital of 11%, and debt with both a book and face value of $12,000. The debt has an annual 8% coupon. The tax rate is 34%. What is the value of the..

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