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Broussard Skateboard's sales are expected to increase by 15% from $8.8 million in 2016 to $10.12...

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Finance

Broussard Skateboard's sales are expected to increase by 15%from $8.8 million in 2016 to $10.12 million in 2017. Its assetstotaled $4 million at the end of 2016. Broussard is already at fullcapacity, so its assets must grow at the same rate as projectedsales. At the end of 2016, current liabilities were $1.4 million,consisting of $450,000 of accounts payable, $500,000 of notespayable, and $450,000 of accruals. The after-tax profit margin isforecasted to be 3%. Assume that the company pays no dividends.Under these assumptions, what would be the additional funds neededfor the coming year? Do not round intermediate calculations. Roundyour answer to the nearest dollar.

Answer & Explanation Solved by verified expert
3.8 Ratings (742 Votes)
2016 Sales 8800000 Total Assets 4000000 Spontaneous Current Liabilities Accounts Payable Accruals Spontaneous Current Liabilities 450000 450000 Spontaneous Current    See Answer
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