Problem 12-01
AFN equation
Broussard Skateboard's sales are expected to increase by 15%from $7.4 million in 2016 to $8.51 million in 2017. Its assetstotaled $5 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 4%, and the forecasted payout ratio is 70%. Usethe AFN equation to forecast Broussard's additional funds neededfor the coming year. Round your answer to the nearest dollar. Donot round intermediate calculations.
