The balance sheet data below pertain to American Pulp and Paper for the recent year ended. In addition, sales were $60 million. For the coming year, management believes that sales will increase by 20% to a total of $72 million. The profit margin is expected to be 5%, and the dividend payout ratio is targeted at 40%. No excess capacity exists, Determine the additional funds needed (AFN) in millions of dollars for the coming year using the Additional Funds Needed. (AFN) Equation. Cash Accounts receivable Inventories Total current assets Fixed assets Total assets Oa10.36 Ob 10.24 040.24 Od-5036 American Pulp and Paper Balance Sheet (Millions of Dollars) $ 3.0 3.0 5.0 $11.0 3.0 $14.0 Accounts payable Notes payable Total current liabilities Long-term debt Common equity Total liabilities and equity $2.0 1.5 $ 3.5 3.0 7.5 $14.0

The balance sheet data below pertain to American Pulp and Paper for the recent year ended. In addition, sales were $60 million. For the coming year, management believes that sales will increase by 20% to a total of $72 million. The profit margin is expected to be 5%, and the dividend payout ratio is targeted at 40%. No excess capacity exists, Determine the additional funds needed (AFN) in millions of dollars for the coming year using the Additional Funds Needed. (AFN) Equation. Cash Accounts receivable Inventories Total current assets Fixed assets Total assets Oa10.36 Ob 10.24 040.24 Od-5036 American Pulp and Paper Balance Sheet (Millions of Dollars) $ 3.0 3.0 5.0 $11.0 3.0 $14.0 Accounts payable Notes payable Total current liabilities Long-term debt Common equity Total liabilities and equity $2.0 1.5 $ 3.5 3.0 7.5 $14.0

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Calculate the external financing needed given the following financial statements. Assume that all costs, all assets, and accounts payable change proportionally with sales. Sales are projected to grow by 25%. Also assume that the company is operating at full capacity. Current Statement of Comprehensive Income Sales $50,000 CoGS 30,000 EBDIT 20,000 Depreciation 10,000 EBIT 10,000 Interest expense 5,000 Taxable income 5,000 Taxes (35%) 1,750 Net Income 3,250 Dividends 975 Addition to RE 2,275 Current Statement of Financial Position Cash $8,000 Accounts receivable 22,000 Inventory 30,000 Total current assets 60,000 Fixed assets 90,000 Total assets $150,000 Accounts payable $15,000 Notes payable 5,000 Total current liabilities 20,000 Long-term debt 40,000 Common stock 40,000 Retained earnings 50,000 Total owners’ equity 90,000 Total Liabilities and OE $150,000 Select one answer A- $33,750 B- $34,656.25 C- $30,906.25 D- $37,500 E- $22,500
Etobicoke Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are difficult to estimate, management has projected the following cash flows for the first two years (in millions of dollars): Revenues Operating Expenses (other than depreciation) CCA Increase in Net Working Capital Capital Expenditures Marginal Corporate Tax Rate Year 1 128.5 47.2 29.9 3.1 28.7 35% Year 2 155.5 63.7 34.1 8.9 41.6 35% a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.) b. What are the free cash flows for this project for the first two years?
CCC currently has sales of $28,000,000 and projects sales of $39,200,000 for next year. The firm's current assets equal $9,000,000 while its fixed assets are $8,000,000. The best estimate is that current assets will rise directly with sales while fixed assets will rise by $500,000. The firm presently has $3,600,000 in accounts payable, $1,800,000 in long-term debt, and $11,600,000 in common equity. All current liabilities are expected to change directly with sales. CCC plans to pay $1,000,000 in dividends next year and has a 5.0% net profit margin. Assuming the increase in fixed assets will occur, what is the most sales could equal next year without using discretionary sources of funds? (Round your answer to the nearest dollar.) $30,330,300 $27,300,000 $33,619,950 $24,103,170 $25,721,514
Steber Packaging Inc. expects sales next year of $42 million. Of this total, 30 percent is expected to be for cash and the balance will be on credit, payable in 30 days. Operating expenses are expected to total $27 million. Accelerated depreciation is expected to total $8 million, although the company will only report $4 million of depreciation on its public financial reports. The marginal tax rate for Steber is 34 percent. Current assets now total $28 million and current liabilities total $15 million. Current assets are expected to increase to $33 million over the coming year. Current liabilities are expected to increase to $17 million. Compute the projected after-tax operating cash flow for Steber during the coming year. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million
Forecast Orwell's additional funds needed (AFN) for next year. Assuming the firm is operating at only 50% of capacity and using the data in the table below, forecast Orwell's AFN for the coming year? Current Assets may be considered negligible. Last year's sales = S0 $164,000 Last year's accounts payable $40,000 Sales growth (ΔS) $46,000 Last year's notes payable $10,000 Last year's total assets = A0* $268,000 Last year's accruals $10,000 Last year's profit margin = PM 0.00 Target payout ratio 0.1
(B) Based on the following information, how much does the company need in external funds for the upcoming fiscal year? The company has Sales $ 5,700, Costs 4,200, Current assets 3,900, Fixed assets 8,100, Current liabilities 2,200, Long-term debt 3,750, and Equity 6,050. Sales increase 15% for the upcoming fiscal year. Payout ratio is 40% and Tax rate is 34%.
Appalachian Registers, Inc. (ARI) has current sales of $50 million. Sales are expected to grow to $70 million next year. ARI currently has accounts receivable of $9 million, inventories of $15 million, and net fixed assets of $18 million. These assets are expected to grow at the same rate as sales over the next year. Accounts payable are expected to increase from their current level of $14 million to a new level of $18 million next year. ARI wants to increase its cash balance at the end of next year by $2 million over its current cash balances, which average $4 million. Earnings after taxes next year are forecasted to be $10 million. Next year, ARI plans to pay dividends of $2 million, up from $500,000 this year. ARI's marginal tax rate is 34 percent. How much external financing is required by ARI next year? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million
The most recent free cash flow (FCF) for Heath Inc. was $200 million, and the management expects the free cash flow to begin growing immediately at a 7% constant rate. The cost of capital is 12%. Using the constant growth model, determine the value of operations of Heath Inc.

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