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

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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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## This note was uploaded on 12/14/2010 for the course FIN 422 taught by Professor Sridharsundaram during the Fall '09 term at Grand Valley State.

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