Chang & Wu Inc A)-$14,440
B)-$15,200
C)-$16,000
D)-$16,800
E)-$17,640

question 21

Multiple Choice

Chang & Wu Inc.is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed 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?
$$\begin{array}{l}\begin{array} {llll} \text { Last year's sales }=\$ 0 && \$ 200,000 &\text { Last year's accounts }\\\text { payable } & \$ 50,000\\\text { Sales growth rate =g }&&40 \%&\text { Last year's notes}\\\text { payable } & \$ 15,000\\\text {Last year's total assets =A*0}&& \$135,000 &\text {Last year's}\\\text {accruals}&\$20,000\\\text { Last year's profit margin=M} &&20.0 \%& \text { Target payout }\\\text { ratio }* 25.0 \%\\\end{array}\end{array}$$

• A)-$14,440
• B)-$15,200
• C)-$16,000
• D)-$16,800
• E)-$17,640

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Definitions:

Current Yield

A financial ratio that calculates the annual interest or dividends received from an investment as a percentage of the current market price.

Coupon

The face value percentage that represents the yearly interest payment on a bond.

Semiannually

Occurring or conducted twice a year; typically refers to payments, reports, or evaluations made every six months.

Quoted

Refers to the latest price at which a stock, commodity, or currency was traded, often seen on exchanges.