ABC CoIs Planning Its Operations for Next Year,and Ronnie Clayton,the CEO,wants

question 16

Multiple Choice

ABC Co.is planning its operations for next year,and Ronnie Clayton,the CEO,wants you to forecast the firm's additional funds needed (AFN) .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. $\begin{array}{llll}\text { Last year's sales }=\text { So } & \$ 350 & \text { Last year's accounts payable } & \$ 40 \\\text { Sales growth rate }=g & 30 \% & \text { Last year's notes payable (to bank) } & \$ 50 \\\text { Last year's total assets }=\text { An } & \$ 500 & \text { Last year's accruals } & \$ 30 \\\text { Last year's profit margin }=M & 5 \% & \text { Target payout ratio } & 60 \%\end{array}$

• A)$102.8
• B)$108.2
• C)$113.9
• D)$119.9

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Definitions:

Medical Supplies

Medical supplies encompass a wide range of products used in healthcare settings, including surgical instruments, diagnostic devices, and items used for patient care.

Administrative Expenses

Expenses that are not directly tied to a specific business activity but are necessary for the overall operation of a company; these may include salaries of administrative personnel, rent, and utilities.

Net Operating Income

A company's total income from operations, excluding expenses and taxes.

Facility Expenses

Costs related to the physical space where business operations occur, such as rent, utilities, and maintenance.