Additional funds carlsbad will need for the coming year

Assignment Help Financial Management
Reference no: EM131825467

Carlsbad Corporation's sales are expected to increase from $5 million in 2016 to $6 million in 2017, or by 20%. Its assets totaled $3 million at the end of 2016. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2016, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 7%, and the forecasted retention ratio is 45%. Use the AFN equation to forecast the additional funds Carlsbad will need for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent.?

Reference no: EM131825467

Questions Cloud

What is the equivalent uniform annual cost : What is the Equivalent Uniform Annual Cost ( EUAC ) of operating the existing machine for the next eight years at 12 % per annum?
Amounts relating to this mortgage : She wants your help in determining the following amounts relating to this mortgage:
What is MPIs times-interest-earned ratio : Its basic earning power (BEP) ratio is 8%, and its return on assets (ROA) is 3%. What is MPI's times-interest-earned (TIE) ratio?
Same expected returns and standard deviation of returns : Two securities that have the same expected returns and standard deviation of returns would offer diversification benefits to investors under what condition?
Additional funds carlsbad will need for the coming year : Use the AFN equation to forecast the additional funds Carlsbad will need for the coming year.
How large of sales increase can the company achieve : How large of a sales increase can the company achieve without having to raise funds externally?
Working to change workers compensation laws : A number of professional team owners are working to change workers’ compensation ( WC ) laws in Illinois.
Each of the next eight years in order to achieve this goal : what equal annual deposits must Peter make at the end of each of the next eight years in order to achieve this goal?
Use falsification exercise : you use a “falsification exercise”, you observe the new car purchasing behavior of families with children graduating in 2015.

Reviews

Write a Review

Financial Management Questions & Answers

  Discussing the possibility of shortening the project

The schedule is something you will want to keep close watch on during the project. What are some examples of when you would want or need to reduce the project’s duration? Would there be any concerns you might want to consider when discussing the poss..

  Company private based on low stock price valuation

Identify an instance where management took a company private based on a low stock price valuation?

  What is the net cash flow of the project for the year

Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,310,000. The fixed asset falls into the three-year MACRS class (MACRS Table).  What is the net cash flow of the project for the fo..

  Compute the realized rate of return for an investor

Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.

  How large of sales increase can the company achieve

How large of a sales increase can the company achieve without having to raise funds externally?

  Calculate the base case cash flow and npv

We are evaluating a project that costs $864,000. Has an eight-year life and has no salvage value. Assume that depreciation is straight line to zero over the life of the project. Sales are projected at 71,000 units per year. Calculate the accounting b..

  Issue new bonds to finance expansion plans

On January 1, 2004, Pearce and Co. will issue new bonds to finance its expansion plans. Currently outstanding 9%, January 1, 2020 Pearce and Co. bonds are selling for $1,141. If interest is paid semiannually for both bonds, what must the coupon rate ..

  What is the value of this stock today if the required return

Gorgon Stoneworks Co. does not expect to pay any dividends for the next three years. Four years from now, the firm hopes to pay $.61 a share and double that amount each year for the following three years. After that, the dividend is expected to incre..

  Debt management and profit ability and market value ratios

Rank in order according to logical and practical framework, these ratios in terms of significance: liquidity, asset management, debt management, profit ability and market value ratios.

  Sketch net present value profile for each of these projects

Consider the following projects, X and Y where the firm can only choose one. Projects X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, resp..

  What is the break-even sales

If fixed costs are $235,054, the unit selling price is $92, and the unit variable costs are $71, what is the break-even sales (units)?

  The cost percentage of a new common stock issue

What is the cost percentage of a new common stock issue?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd