Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
Bartleby Related Questions Icon

Related questions

Question

Please help with practice problems and the answers are one those numbers in the picture

2. More on the AFN (Additional Funds Needed) equation
Green Moose Industries reported sales of $743,000 at the end of last year, but this year, sales are expected to grow by 6%. Green Moose expects to
maintain its current profit margin of 20% and dividend payout ratio of 30%. The following information was taken from Green Moose's balance sheet:
Total assets:
Accounts payable:
Notes payable:
Accrued liabilities:
Based on the AFN equation, the firm's AFN for the current year is
$425,000
$75,000
$25,000
$60,000
A positively signed AFN value represents:
Bec
out
O A shortage of internally generated funds that must be raised outside the company to finance the company's forecasted future growth.
71.2% oint at which the funds generated within the firm equal the demands for funds to finance the firm's future expected sales
62.3% uirements.
80.1% urplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends.
89.0%
excess funds, Green Moose Industries is thinking about raising its dividend payout ratio to satisfy shareholders. Green Moose could pay
of its earnings to shareholders without needing to raise any external capital.(Hint: What can Green Moose increase its dividend
payout ratio to before the AFN becomes positive?)
expand button
Transcribed Image Text:2. More on the AFN (Additional Funds Needed) equation Green Moose Industries reported sales of $743,000 at the end of last year, but this year, sales are expected to grow by 6%. Green Moose expects to maintain its current profit margin of 20% and dividend payout ratio of 30%. The following information was taken from Green Moose's balance sheet: Total assets: Accounts payable: Notes payable: Accrued liabilities: Based on the AFN equation, the firm's AFN for the current year is $425,000 $75,000 $25,000 $60,000 A positively signed AFN value represents: Bec out O A shortage of internally generated funds that must be raised outside the company to finance the company's forecasted future growth. 71.2% oint at which the funds generated within the firm equal the demands for funds to finance the firm's future expected sales 62.3% uirements. 80.1% urplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends. 89.0% excess funds, Green Moose Industries is thinking about raising its dividend payout ratio to satisfy shareholders. Green Moose could pay of its earnings to shareholders without needing to raise any external capital.(Hint: What can Green Moose increase its dividend payout ratio to before the AFN becomes positive?)
2. More on the AFN (Additional Funds Needed) equation
Green Moose Industries reported sales of $743,000 at the end of last year, but this year, sales are expected to grow by 6%. Green Moose expects to
maintain its current profit margin of 20% and dividend payout ratio of 30%. The following information was taken from Green Moose's balance sheet:
Total assets:
Accounts payable:
Notes payable:
Accrued liabilities:
$425,000
$75,000
$25,000
$60,000
Based on the AFN equation, the firm's AFN for the current year is
A positively signed AFN value represents:
-$120,719
-$88,218
O A shortage of internally generated funds that must be r
O A point at which the funds generated within the firm eq
requirements.
O A surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends.
-$92,861
the company to finance the company's forecasted future growth.
hds for funds to finance the firm's future expected sales
-$102,147
Because of its excess funds, Green Moose Industries is thinking about raising its dividend payout ratio to satisfy shareholders. Green Moose could pay
out
of its earnings to shareholders without needing to raise any external capital. (Hint: What can Green Moose increase its dividend
payout ratio to before the AFN becomes positive?)
expand button
Transcribed Image Text:2. More on the AFN (Additional Funds Needed) equation Green Moose Industries reported sales of $743,000 at the end of last year, but this year, sales are expected to grow by 6%. Green Moose expects to maintain its current profit margin of 20% and dividend payout ratio of 30%. The following information was taken from Green Moose's balance sheet: Total assets: Accounts payable: Notes payable: Accrued liabilities: $425,000 $75,000 $25,000 $60,000 Based on the AFN equation, the firm's AFN for the current year is A positively signed AFN value represents: -$120,719 -$88,218 O A shortage of internally generated funds that must be r O A point at which the funds generated within the firm eq requirements. O A surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends. -$92,861 the company to finance the company's forecasted future growth. hds for funds to finance the firm's future expected sales -$102,147 Because of its excess funds, Green Moose Industries is thinking about raising its dividend payout ratio to satisfy shareholders. Green Moose could pay out of its earnings to shareholders without needing to raise any external capital. (Hint: What can Green Moose increase its dividend payout ratio to before the AFN becomes positive?)
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Text book image
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:9781260013962
Author:BREALEY
Publisher:RENT MCG
Text book image
Financial Management: Theory & Practice
Finance
ISBN:9781337909730
Author:Brigham
Publisher:Cengage
Text book image
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Text book image
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Text book image
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education