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FINC 5000 Week 8 Homework Problems Chapter 14 ;;; Apr 06 Problem 14-6 Anticipated sales growth rate: 100% Booth Company Historical and Projected...

The Booth Company's sales are forecasted to increase from $1,000 in 2007 to $2,000 in 2008. Here is the balance sheet for December 31, 2007.
Cash                  100          Accts Payable                     50
Acc Rec              200          Notes Payable                   150
Inventory           200          Accruals                             50
Net Fixed assets  500          Long-Term Debt                400
                                        Common Stock                  100
                                        Retained earnings              250
Total Assets    $1,000         Total Liabilities & Equity  $1,000
Booth's fixed assets were used to only 50% of capacity during 2007, but its current assets were at their proper levels. All assets except fixed assets increase at the same rate as sales, and fixed assets would also increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 5%, and its payout ratio will be 60%. What is Booth's additional funds needed for the coming year? Construct projected earnings and enter missing data.
FINC 5000 Week 8 Homework Problems Chapter 14 ;;; Apr 06 Problem 14-6 Anticipated sales growth rate: 100% Booth Company Historical and Projected Income Statements (in $000s except per share data) Historical Projected 2007 2008 Sales Net Income Dividends paid Addition to Retained Earnings Booth Company Historical and Projected Balance Sheets (in $000s) Historical Projected Dec 31, 2007 Dec 31, 2008 ASSETS Current Assets: Cash Accounts Receivable Inventory Total Current Assets Fixed Assets TOTAL ASSETS LIABILITIES AND EQUITY Current Liabilities: Accounts payable Accrued Expenses Notes Payable Total Current Liabilities Long-term Debt Total Liabilities Common Stock Retained Earnings Total Equity TOTAL LIABILITIES AND EQUITY Part a. Additional Funds Needed (AFN): Total Liabilities & Equity, including new external financing:
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FINC 5000 Week 8 Homework Problems Chapter 14 Problem 14-6 31-Dec-07 Solution per the AFN Formula: Sales $0 A* $0 Costs $0 So $0 Profit $0 5% margin assumed ΔS $0 Required increase in assets #DIV/0! Cash $0 A/R $0 L* $0 Inventory $0 So $0 ixed assets $0 ΔS $0 Total assets $0 Spontaneous increase in liabilities #DIV/0! A/P $0 M #DIV/0! Accruals $0 S1 $0 N/P $0 RR 0.4 LTD $0 Increase in retained earnings #DIV/0! mon Stock $0 et earnings $0 AFN #DIV/0! es & Equity $0
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FINC 5000 Week 8 Homework Problems
Chapter 14
;;; Apr 06 Problem 14-6
Anticipated sales growth rate: 100%
Booth Company
Historical and Projected Income Statements
(in $000s except per share data)...

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