Afn equation to forecast the additional funds


Problem:

Carter Corporation's sales are expected to increase from $5 million in 2008 to $6 million in 2009, or by 20%. Its assets totaled $3 million at the end of 2008. Carter is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2008, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 5%, and the forecasted retention ratio is 30%.

Required:

Question: Use the AFN equation to forecast the additional funds Carter will need for coming year.

Note: Provide thorough explanation of the given question.

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Afn equation to forecast the additional funds
Reference No:- TGS0892526

Expected delivery within 24 Hours