Your Firm Recorded Sales for the Most Recent Year of $10

question 44

Multiple Choice

Your firm recorded sales for the most recent year of $10 million generated from an asset base of $7 million, producing a $500,000 net income. Sales are projected to grow at 20%, causing spontaneous liabilities to increase by $200,000. In the most recent year, $200,000 was paid out as dividends, and the current payout ratio will continue in the upcoming years. What is your firm's AFN?

• A) $200,000
• B) $600,000
• C) $840,000
• D) $960,000
• E) $1,400,000

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Definitions:

Undisclosed Principal

A party in a contract whose identity is not revealed to the other party.

Agent Liability

The legal principle that holds agents accountable for their actions, especially when such actions cause harm or breach contractual obligations.

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Tort

A violation of another person’s rights or a civil wrongdoing that does not arise out of a contract or statute; primary types are intentional, negligent, and strict-liability torts.