Additional funds needed with excess capacity


Additional Funds Needed with Excess Capacity:

A firm has the following balance sheet

917_Additional funds needed.jpg

Sales for the year just ended were $400, and fixed assets were used at 80 percent of capacity, but its current assets were at optimal levels. Sales are expected to grow by 5 percent next year, and the dividend payout ratio is 60 percent. How much additional funds (APN) will be needed?

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Finance Basics: Additional funds needed with excess capacity
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