Carlsbad Corporation's sales are expected to increase from $5 million in 2021 to $ 6 million in 2022, or by 20%. Its assets totaled $4 million at the end of 2021. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2021, 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 4%, and the forecasted retention ratio is 30%. 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 dollar.
Carlsbad Corporation's sales are expected to increase from $5 million in 2021 to $ 6 million in 2022, or by 20%. Its assets totaled $4 million at the end of 2021. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2021, 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 4%, and the forecasted retention ratio is 30%. 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 dollar.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter9: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 1P: Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2018 to $9.2 million...
Question
please give me answer in relatable
![Carlsbad Corporation's sales are expected to increase from $5 million in 2021 to $
6 million in 2022, or by 20%. Its assets totaled $4 million at the end of 2021.
Carlsbad is at full capacity, so its assets must grow in proportion to projected
sales. At the end of 2021, 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 4%, and the forecasted retention
ratio is 30%. 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 dollar.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5bdf2140-d85a-4a31-8049-532ef66986b4%2Fe7f047e7-ac55-46b6-a86c-76ba26a19d48%2Fvldefde_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Carlsbad Corporation's sales are expected to increase from $5 million in 2021 to $
6 million in 2022, or by 20%. Its assets totaled $4 million at the end of 2021.
Carlsbad is at full capacity, so its assets must grow in proportion to projected
sales. At the end of 2021, 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 4%, and the forecasted retention
ratio is 30%. 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 dollar.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning