Quantitative Problem 1: Beasley Industries' sales are expected to increase from $5 million in 2017 to $6  million in 2018, or by 20%. Its assets totaled $3 million at the end of 2017. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2017, current liabilities are $790,000, consisting of $150,000 of accounts payable, $500,000 of notes payable, and $140,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 70%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations.

Quantitative Problem 2: Mitchell Manufacturing Company has $1,100,000,000 in sales and $220,000,000 in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity.

1. What level of sales could Mitchell have obtained if it had been operating at full capacity? Round your answer to the nearest dollar. Do not round intermediate calculations.
   $
2. What is Mitchell's Target fixed assets/Sales ratio? Round your answer to two decimal places. Do not round intermediate calculations.
   %
3. If Mitchell's sales increase by 60%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Round your answer to the nearest dollar. Do not round intermediate calculations.

Answer rating: 100% (QA)

1 To calculate the additional funds needed AFN using the AFN equation we need to consider the various components The AFN equation is as follows AFN AS... View the full answer