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Broussard Skateboard's sales are expected to increase by20% from $7.0million in 2016 to $8.40million in 2017....

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Finance

Broussard Skateboard's sales are expected to increase by20% from$7.0million in 2016 to $8.40million in 2017. Its assets totaled$3million 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 $450,000of accounts payable, $500,000of notespayable, and $450,000of accruals. The after-tax profit margin isforecasted to be3%. Assume that the company pays no dividends.Underthese 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
4.2 Ratings (691 Votes)
2016 Sales 7000000 Total Assets 3000000 Spontaneous Current Liabilities Accounts Payable Accruals Spontaneous Current Liabilities 450000 450000 Spontaneous Current    See Answer
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