Your company is operating at full capacity. Based on the AFN formula and the Percentage of Sales method, what is the AFN for the coming year?

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
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H6.

Java Company is planning its operations for next year, and as its CFO, you will need to forecast the company’s additional funds needed (AFN) based on the following data. Dollars are in millions.

 

Last year’s sales = $415 Last year’s accounts payable = $50

Sales growth rate = 30% Last year’s notes payable = $50

Last year’s total assets = $595 Last year’s accruals = $30

Last year’s profit margin = 5.31% Target payout ratio = 60%

 

Your company is operating at full capacity. Based on the AFN formula and the Percentage of Sales method, what is the AFN for the coming year?

 

Group of answer choices

 

$142.20

 

$141.36

 

$143.04

 

$144.53

 

$145.38

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