1. Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and theCEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecastare shown below. However, the CEO is concerned about the impact of a change in the payoutratio from the 10% that was used in the past to 50%, which the firm's investment bankers haverecommended. Based on the AFN equation, by how much would the AFN for the coming yearchange if HHW increased the payout from 10% to the new and higher level? All dollars are inmillions.Last year's sales = So$300Last year's accounts payable $50Sales growth rate = g40%Last year's notes payable$15Last year's total assets = Ao$500Last year's accruals$20Last year's profit margin = PM 20%Initial payout ratio10%New payout ratio50%a. $28.2b. $33.6c. $26.9d. $30.9e. $25.5

Answer: The increase of AFN = $33.6 mln

Howton & Howton Worldwide (HHW) is planning its op CEO wants you to forecast the firm's additional funds ne are shown below. However, the CEO is concerned about ratio from the 10% that was used in the past to 50%, whie recommended. Based on the AFN equation, by how mucl change if HHW increased the payout from 10% to the ne

Howton & Howton Worldwide (HHW) is planning its op CEO wants you to forecast the firm's additional funds ne are shown below. However, the CEO is concerned about ratio from the 10% that was used in the past to 50%, whie recommended. Based on the AFN equation, by how mucl change if HHW increased the payout from 10% to the ne

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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