The Booth Company's sales are forecasted to increase from $1,000 in 2004 to $2,000 in 2005. Here
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The Booth Company's sales are forecasted to increase from $1,000 in 2004 to $2,000 in 2005. Here is the December 31, 2004, balance sheet:
Booth's fixed assets were used to only 50 percent of capacity during 2004, but its current assets were at their proper levels. All assets except fixed assets increase at the same rate as sales, and fixed assets would also increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 5 percent, and its payout ratio will be 60 percent. What is Booth's additional funds needed (AFN) for the coming year?
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Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
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