Old Harbor Electrical sales were $550,000 during 2022, and its year-end assets were $440,000. For 2023,...

 

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Old Harbor Electrical sales were $550,000 during 2022, and its year-end assets were $440,000. For 2023, sales are expected to grow by 5%, and since the firm is operating at full capacity, its assets must grow in proportion to sales. Its current liabilities consisted of $65,000 of accounts payable, $25,000 of notes payable, and $55,000 of accruals. Its after-tax profit margin is forecasted to be 17%, and the firm plans to pay out 25% of its earnings. Based on the AFN equation, what is the firm's additional funds needed (AFN) for 2023? (HINT: does notes payable spontaneously increase with sales? Show all work.) = = (A*/S)AS - (L*/S.)AS - MS, (RR) A. -$30,131 B. -$37,631 C. -$45,631 D. -$50,131 E. -$57,631 Old Harbor Electrical sales were $550,000 during 2022, and its year-end assets were $440,000. For 2023, sales are expected to grow by 5%, and since the firm is operating at full capacity, its assets must grow in proportion to sales. Its current liabilities consisted of $65,000 of accounts payable, $25,000 of notes payable, and $55,000 of accruals. Its after-tax profit margin is forecasted to be 17%, and the firm plans to pay out 25% of its earnings. Based on the AFN equation, what is the firm's additional funds needed (AFN) for 2023? (HINT: does notes payable spontaneously increase with sales? Show all work.) = = (A*/S)AS - (L*/S.)AS - MS, (RR) A. -$30,131 B. -$37,631 C. -$45,631 D. -$50,131 E. -$57,631

Answer rating: 100% (QA)

To calculate the Additional Funds Needed AFN for 2023 using the AFN equation we need to break down t... View the full answer