CN Railways Is North America's Fifth Largest Railway A)$64 Million
B)$165 Million
C)$342 Million
D)$580 Million
E)$965 Million

question 55

Multiple Choice

CN Railways is North America's fifth largest railway. Use the equation approach and CN's financial information for Year 10 to calculate additional funds needed (AFN) in Year 11. Selected Financial Statement Values and Ratios
CN Railway Company
As of December 31, Year 10 ($ millions)
$$\begin{array} { | c | c | } \hline \text { Total Assets } & \$ 18,924 \\\hline \text { Fixed Assets } & 16,898 \\\hline \text { Assets that Change with Sales } & 18,061 \\\hline \text { Total Revenues (Year 10) } & 6,110 \\\hline \text { Total Revenues (Year 11) } & 6,721 \\\hline \text { Change in Revenues } & 611 \\\hline \text { Total Liabilities } & 12,297 \\\hline \begin{array} { c } \text { Liabilities that Change with } \\\text { Sales }\end{array} & 2,134 \\\hline \text { Profit Margin } & 9.35 \% \\\hline \text { Dividend Payout Ratio } & 0 \% \\\hline\end{array}$$

• A)$64 million
• B)$165 million
• C)$342 million
• D)$580 million
• E)$965 million

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Definitions:

Secondary Market

A market where investors buy and sell securities they already own rather than purchasing new issues from the issuing company.

Securities

Securities that signify either an equity stake in a publicly listed company, a debt interest in a corporation or government entity, or entitlements to ownership through options.

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Firm Commitment

An underwriting agreement in which an underwriter agrees to buy all the unsold shares in an initial public offering (IPO).