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. Based on the AFN equation, by how much would the AFN for the coming year change if Jonson, Inc. decreased the retention from 90% to the new level? All pesos are in millions. 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
Jonson, Inc. is planning its operations for the coming year, and the CEO wants you to
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%
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