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25.
Splash Bottling’s December 31st balance sheet is given below:Cash$ 10Accounts payable$ 15Accounts receivable25Notes payable
20Inventories40Accrued wages and taxes15Net fixed assets75Long-term debt30Common equity70Total liabilitiesTotal assets$150and equity$150Sales during the past year were $100, and they are expected to rise by 50percent to $150 during next year. Also, during last year fixed assets werebeing utilized to only 85 percent of capacity, so Splash could havesupported $100 of sales with fixed assets that were only 85 percent of lastyear’s actual fixed assets. Assume that Splash’s profit margin will remainconstant at 5 percent and that the company will continue to pay out 60percent of its earnings as dividends. To the nearest whole dollar, whatamount of nonspontaneous, additional funds (AFN) will be needed during thenext year?a. $57b. $51c. $36d. $40e. $48
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