Chachagogo, Inc. is planning its operations for next year, and 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? Last year’s sales P200,000 Last year's accounts payable P50,000 Sales growth rate 40% Last year's notes payable P25,000 Last year’s current assets P65,000 Last year's accruals P20,000 Last year’s noncurrent assets P70,000 Target plowback ratio 75.0% Last year’s profit margin 20.0% Group of answer choices -P50,000 -P16,000 -P54,000 -P44,000 -P40,000
1. Chachagogo, Inc. is planning its operations for next year, and the CEO wants you to
Last year’s sales P200,000 Last year's accounts payable P50,000
Sales growth rate 40% Last year's notes payable P25,000
Last year’s current assets P65,000 Last year's accruals P20,000
Last year’s noncurrent assets P70,000 Target plowback ratio 75.0%
Last year’s profit margin 20.0%
Jonson, Inc. is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the retention ratio from 90% that was used in the past to 50%, which the firm's investment bankers have recommended. Seventy-five percent of the total assets are considered variable.
Last year’s sales P300.0 Last year’s accounts payable P40.0
Sales growth rate 15% Last year’s notes payable P10.0
Last year’s total assets P500.0 Last year’s accruals P20.0
Last year’s profit margin 15.0% Initial retention ratio 90.0%
What would the company’s capital intensity ratio be if the company changed the retention ratio to the new level?
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