Author Question: Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the ... (Read 61 times)

Tiffanyanne824 · **on:** Aug 7, 2023

Question 1

Canada Manufacturing has net income of $24,000 on sales of $80,000, fixed assets of $139,000, and total assets of $220,000. The firm retains 65% of its earnings. If the firm is operating at 65% capacity, what are the full capacity sales?

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$110,000

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$115,000

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$120,000

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$123,000

Question 2

Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?

Last year’s sales = S₀	$300,000	Last year’s accounts payable	$65,000
Sales growth rate = g	30%	Last year’s notes payable (to bank)	$49,000
Last year’s total assets = A₀	$160,000	Last year’s accruals	$30,000
Last year’s profit margin = M	25%	Target payout ratio	30%

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–$45,000

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–$48,750

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–$50,250

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–$54,080

Yermi196 · **Reply #1 on:** Aug 7, 2023

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