Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet: Green Caterpillar Garden Supplies In

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Green Caterpillar Garden Supplies Inc. has the following
end-of-year balance sheet:
Green Caterpillar Garden Supplies Inc. Balance Sheet For the
Year Ended on December 31
The firm is currently in the process of forecasting sales, asset
requirements, and required funding for the coming year. In the year
that just ended, Green Caterpillar Garden Supplies Inc. generated
$300,000 net income on sales of $14,000,000. The firm expects sales
to increase by 16% this coming year and also expects to maintain
its long-run dividend payout ratio of 45%.
Suppose Green Caterpillar Garden Supplies Inc.’s assets are
fully utilized. Use the additional funds needed (AFN) equation to
determine the increase in total assets that is necessary to support
Green Caterpillar Garden Supplies Inc.’s expected sales. (Note: Do
not round intermediate calculations.)
$384,000
$528,000
$432,000
$480,000
When a firm grows, some liabilities grow spontaneously along
with sales. Spontaneous liabilities are a source of capital that
the firm will generate internally, so they reduce the need for
external capital. How much of the total increase in assets will be
supplied by spontaneous liabilities for Green Caterpillar Garden
Supplies Inc. this year? (Note: Do not round intermediate
calculations.)
$64,000
$70,400
$51,200
$57,600
In addition, Green Caterpillar Garden Supplies Inc. is expected
to generate net income this year. The firm will pay out some of its
earnings as dividends 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 are expected to remain constant.
Given the preceding information, Green Caterpillar Garden
Supplies Inc. is expected to generate $______from operations that
will be added to retained earnings. (Note: Do not round
intermediate calculations.)
According to the AFN equation and projections for Green
Caterpillar Garden Supplies Inc., the firm’s AFN is $__________.
(Note: Do not round intermediate calculations.)