The AFN equation Green Moose Industries has the following end-of-year balance sheet: Green Moose Industries Balance Shee

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The AFN equation
Green Moose Industries has the following end-of-year balancesheet:
Green Moose Industries
Balance Sheet
For the Year Ended on December 31
The firm is currently in the process of forecasting sales, assetrequirements, and required funding for the coming year. In the yearthat just ended, Green Moose Industries generated $400,000 netincome on sales of $14,500,000. The firm expects sales to increaseby 16% this coming year and also expects to maintain its long-rundividend payout ratio of 45%.
Suppose Green Moose Industries’s assets are fully utilized. Usethe additional funds needed (AFN) equation to determine theincrease in total assets that is necessary to support Green MooseIndustries’s expected sales. (select the correct option)
a. $480,000
b. $552,000
c. $576,000
d. $504,000
When a firm grows, some liabilities grow spontaneously alongwith sales. Spontaneous liabilities are a source of capital thatthe firm will generate internally, so they reduce the need forexternal capital. How much of the total increase in assets will besupplied by spontaneous liabilities for Green Moose Industries thisyear? (select the correct option)
a. $64,000
b. $73,600
c. $76,800
d. $67,200
In addition, Green Moose Industries is expected to generate netincome this year. The firm will pay out some of its earnings asdividends but will retain the rest for future asset investment.Again, the more a firm generates internally from its operations,the less it will have to raise externally from the capital markets.Assume that the firm’s profit margin and dividend payout ratio areexpected to remain constant.
Given the preceding information, Green Moose Industries isexpected to generate[$______________] from operations thatwill be added to retained earnings.
According to the AFN equation and projections for Green MooseIndustries, the firm’s AFN is [$_______________]
.