Question

Clayton Industries is planning its operations for next year. Ronnie Clayton, the CEO, wants you to...

Clayton Industries is planning its operations for next year. Ronnie Clayton, the CEO, wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions.

​

Last year's sales = S0

$350

  Last year's accounts payable

$40

Sales growth rate = g

30%

  Last year's notes payable

$50

Last year's total assets = A0*

$500

  Last year's accruals

$30

Last year's profit margin = PM

5%

  Target payout ratio

60%

Select one:

a. $102.8

b. $108.2

c. $113.9

d. $119.9

e. $125.9

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