Exam1Q4 - current liabilities. Assume that the firm's...

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Using the AFN formula approach, calculate the total assets of Johnson Company given the following information: Sales this year = $3,000; increase in sales projected for next year = 20%; net income this year $250; dividend payout ratio = 40%; projected excess funds available next year =$100; accounts payable = $600; notes payable = $100; and accrued wages and taxes = $200. Except for the accounts noted, there were no other
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Unformatted text preview: current liabilities. Assume that the firm's profit margin remains constant and that the company is operating at full capacity AFN = A* S0 ( S) - L* S0 ( S) - MS 1 (1 - d)-$100 = $3,000 A* ($600) - $3,000 $800 ($600) - $3,000 $250 ($3,600)(0.6)-$100 = 0.20A* - $160 - $180 0.20A* = $240 A* = $1,200....
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