ABC Co Is Planning Its Operations for Next Year, and Ronnie

question 24

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. Last year's sales = S₀
$350
Last year's accounts payable
$40
Sales growth rate = g
30%
Last year's notes payable (to bank)
$50
Last year's total assets = A₀
$500
Last year's accruals
$30
Last year's profit margin = M
5%
Target payout ratio
60%

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

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