OYou have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, & Worthington (HHW), which is planning itsoperation for the coming year. The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO isconcerned about the impact of a change in the payout ratio from the 10% that was used in the past to 75%, which the firm's investment bankershave recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from10% to the new and higher level? All dollars are in millions.Last year's sales - SoSales growth rate=gLast year's total assets - AgLast year's profit margin = PMSelect the correct answer.O a $533Ob $50.7O $54.6Od. 152.0O. 1572Dewan Ke-17p9607xlsx AExercise 13-17 (1)adsx$300.040%$50020.0%Last year's accounts payableLast year's notes payableLast year's accrualsInitial payout ratioEXERCISE 13-17 D.xlsxA0 Exercise 13-17.xlsx$50.0$15.0$20.010.0%Show allA-Z9.

AFN (additional funds needed) is the term used for the amount needed to be raised from external…

Answered: You have been asked to forecast the…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 11P

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You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, & Worthington (HHW), which is planning its operation for the coming year. The firm is operating at full capacity. 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 65%, 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 $15.0 Last year's total assets = A0* $500 Last year's accruals $20.0 Last year's profit margin = PM 20.0% Initial payout ratio 10.0% Select the correct answer. a. $47.7 b. $49.2 c. $50.7 d. $44.7…
You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, & Worthington (HHW), which is planning its operation for the coming year. The firm is operating at full capacity. 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 70%, 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 $15.0 Last year's total assets = A0* $500 Last year's accruals $20.0 Last year's profit margin = PM 20.0% Initial payout ratio 10.0%
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Daniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the company's operations next year, and he wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S0 $350 Last year's accounts payable $40 Sales growth rate = g 30% Last year's notes payable $50 Last year's total assets = A0* $760 Last year's accruals $30 Last year's profit margin = PM 5% Target payout ratio 60%

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