Hide Feedback Correct Quantitative Problem 1: Beasley Industries' sales are expected to increase from $5 million in 2021 to 56 million in 2022, or by 20%. Its assets totaled 52 million at the end of 2021. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2021, current liabilities are $700,000, consisting of $160,000 of accounts payable, $500,000 of notes payable, and $40,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 60%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $2 million should be entered as 2,000,000. Round your answer to the nearest dollar. s Hide Feedback Incorrect Check My Work Feedback Refer to the AFN equation and substitute known values into this equation Calculate AS in the AFN equation as the difference in next year's and the current year's sales, Be careful to not include the notes payable amount in the spontaneously generated funds calculations required in the AFN equation. Remember to use next year's sales level in calculating the increase in the retained earnings component of the AFN equation. Be careful of the mathematical order of operations. The AFN equation assumes that ratios remain constant. However, firms are not always operating at full capacity so adjustments need to be made to the existing asset forecast. Excess capacity adjustments are changes made to the existing asset forecast because the firm is not operating at full capacity. For example, a firm may not be at full capacity with respect to its fixed assets. First, the firm's management must find out the firm's full capacity sales as follows: Full capacity sales = Percentage of caparity Artual sales At wlaich fixed were operated Next, management would calculate the firm's target fixed assets ratio as follows: Target fixed avete - Actualidade Salam Fall capacity a Finally, management would use the target fixed assets ratio with the projected sales to calculate the firm's required level of fixed assets as follows: Required level of fixed assets = (Target fixed assets/Sales) (Projected sales) Quantitative Problem 2: Mitchell Manufacturing Company has 51,400,000,000 in sales and 330,000,000 in fixed assets. Currently, the company's fixed assets are operating at 80% of capacity. 3. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar $ b. What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. X3 % c. If Mitchell's sales increase 40%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar. $ Hide Feedback Incorrect Check My Work Feedback a. Refer to the Full capacity sales equation and substitute the numbers given in the problem into the equation. b. Refer to the Target fixed assets/Sales equation and substitute the numbers into the equation. c. Calculate the projected sales for the coming year