Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet:Green Caterpillar Garden Supplies Inc. Balance Sheet For the Year Ended on December 31AssetsLiabilitiesCurrent Assets:Current Liabilities:Cash and equivalentsAccounts payableAccounts receivableAccrued liabilitiesInventoriesTotal Current AssetsNet Fixed Assets:Net plant and equipment(cost minus depreciation)Total Assets$150,000400,000350,000$900,000$2,100,000$3,000,000Notes payableTotal Current LiabilitiesLong-Term BondsTotal DebtCommon EquityCommon stockRetained earningsTotal Common EquityTotal Liabilities and Equity$250,000150,000100,000$500,0001,000,000$1,500,000800,000700,000$1,500,000$3,000,000 The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended,Green Caterpillar Garden Supplies Inc. generated $500,000 net income on sales of $14,000,000. The firm expects sales to increase by 18% thiscoming year and also expects to maintain its long-run dividend payout ratio of 45%.Suppose Green Caterpillar Garden Supplies Inc.'s assets are fully utilized. Use the additional funds needed (AFN) equation to determine the increase intotal assets that is necessary to support Green Caterpillar Garden Supplies Inc.'s expected sales. (Note: Do not round intermediate calculations.)O $621,000O $432,000O $540,000O $459,000

As per AFN equation, the additional financing needed is

Answered: Green Caterpillar Garden Supplies Inc.…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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