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The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the D 2019, balance sheet: Cash Accounts receivable Inventories Net fixed assets Total assets $100 200 200 500 $1,000 Accounts payable Notes payable Accruals Long-term debt Common stock Retained earnings Total liabilities and equity $50 150 50 400 100 250 $1,000

The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the D 2019, balance sheet: Cash Accounts receivable Inventories Net fixed assets Total assets $100 200 200 500 $1,000 Accounts payable Notes payable Accruals Long-term debt Common stock Retained earnings Total liabilities and equity $50 150 50 400 100 250 $1,000

Essentials Of Investments
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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Additional Funds Needed The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the December 31, 2019, balance sheet: Cash Accounts receivable Inventories $100 Net fixed assets 200 200 Accounts payable Notes payable Accruals 500 $50 150 Long-term debt Common stock Retained earnings Total assets $1,000 Total liabilities and equity $1,000 Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 8% and its payout ratio to be 45%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar. $ 50 400 100 250
Transcribed Image Text:Additional Funds Needed The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the December 31, 2019, balance sheet: Cash Accounts receivable Inventories $100 Net fixed assets 200 200 Accounts payable Notes payable Accruals 500 $50 150 Long-term debt Common stock Retained earnings Total assets $1,000 Total liabilities and equity $1,000 Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 8% and its payout ratio to be 45%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar. $ 50 400 100 250
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