By how much would the afn for the coming year change

Assignment Help Finance Basics

Reference no: EM13287349

Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.

Last year's sales = S0 $300.0 Last year's accounts payable $50.0
Sales growth rate = g 40% Last year's notes payable (to bank) $15.0
Last year's total assets = A0 $500.0 Last year's accruals $20.0
Last year's profit margin = M 20.0% Initial payout ratio 10.0%
New payout ratio 50.0%

a. $31.9
b. $33.6
c. $35.3
d. $37.0
e. $38.9

Reference no: EM13287349

Questions Cloud

The human desire of mankind to seek and worship god : What do the ancient religions (Egyptian, Mesopotamian, Greek, Roman, Mayan, Aztec, and African) teach us about the human desire of mankind to seek and worship God?

Describe federalism and how it relates to political power : Describe federalism and how it relates to the political powers granted by the Texas Constitution(s) and the United States Constitution. Be sure that you adequately address the concepts of separation of powers and the Supremacy Clause.

Obtain the radius of the sphere : The electric potential inside a conducting sphere is 245V, and a distance d = 32.0cm from the surface of the sphere, obtain the radius of the sphere

Suppose the a- b recombination frequency is 0.3 : suppose the A- B recombination frequency is 0.3. In a cross of an AB/ab x AB/ab parents, what is the frequency of aabb offspring? In a cross of an Ab/aB x Ab/aB parents, what is the frequency of aabb offspring?

By how much would the afn for the coming year change : Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below.

Genetic model accounting : Consider two coat-color loci (R/r, G/g), where the genotypes have the following phenotypes R-G- = yellow, rrG- = green, R-gg = red, rrgg = white.

How many outlets are permitted on a lighting branch circuit : Given a used area of 2016 ft2 and unused area of 2000ft2, (a) find the minimum number of 25-amper lighting branch circuits required for residence, (b) how many outlets are permitted on a lighting branch circuit

Review and reflect upon your current writing process : Need a 750 word essay in which you review and reflect upon your current writing process.

Find the circuit elements-power and power factor : When a voltage v(t)=250 sin[314t-(pi/4)] is applied to a circuit,the current in the circuit is found to be i(t)=50 sin[314t-(pi/2)] amperes. Find the circuit elements,power & power factor.

User Account

All Pages