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Financial Planning and Forecasting3

Financial Planning and Forecasting3 - Balanc e Sheet 2002...

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Old Exam Questions - Financial Planning and Forecasting Page 13 of 35 Pages Balance Sheet 2002 Actual 2003 Forecast 2003 After AFN Current Assets \$5,000.00 Net Fixed Assets \$3,000.00 Total Assets \$8,000.00 A/P and Accruals \$1,500.00 Debt \$500.00 Common Stock \$1,000.00 Retained Earnings \$5,000.00 Total Liability and Equity \$8,000.00 Additional Funds Needed Using the tables above (if you wish) do a first pass and determine the additional funds needed, then do a second pass and make any adjustments necessary to dividends and additions to retained earnings so that your balance sheet balances. How much will the firm then pay out in dividends? A. \$165.80 B. \$198.80 C. \$233.80 D. \$271.80 E. \$302.80 11. You are given the following historical data for sales and inventory: Year Sales Inventory 2002 \$2,750.00 ? 2001 \$2,600.00 \$725.00 2000 \$2,400.00 \$700.00 1999 \$1,950.00 \$650.00 1998 \$2,500.00 \$600.00 1997 \$2,000.00 \$500.00 Perform a regression analysis (the relationship is not strictly linear, so you will not be able to use rise/run to determine the slope) and determine what inventory will be in 2002, rounded off to the nearest whole dollar.

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Old Exam Questions - Financial Planning and Forecasting Page 14 of 35 Pages 12. Your company had the following balance sheet for 2004: Assets 2004 Liabilities & Equity 2004 Cash \$1,600 Accounts Payable \$700 Accounts Receivable \$900 Accrued Wages \$300 Inventories \$1,900 Notes Payable \$4,000 Net Fixed Assets \$68,000 Long-Term Debt \$53,000 Common Stock \$6,400 Retained Earnings \$8,000 Total Assets \$72,400 Total Liabilities & Equity \$72,400 Assume that you expect sales in 2005 to increase from \$20,000 to \$40,000, increasing net income to \$2,000, all of which will be added to retained earnings. Also assume that you feel that you can handle the increase in sales without adding any fixed assets, but that all other current assets and spontaneous liabilities will increase in proportion to sales. Using a spreadsheet approach, but ignoring financing feedback effects, determine the additional capital that you will need to raise.
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