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Additional Funds Needed

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Please assist in answering the following questions. Please show work in Excel.
Baxter Video Products' sales are expected to increase by 20% from $5 million in 2010 to $6 million in 2011. Its assets totaled $4 million at the end of 2010. Baxter is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2010, current liabilities were $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 55%. Assume that the company pays no dividends. Under these assumptions, what would be the additional funds needed for the coming year? Round your answer to the nearest dollar.
$
Why is this AFN different from the one when the company pays dividends?

I. Under this scenario the company would have a higher level of retained earnings but this would have no effect on the amount of additional funds needed.
II. Under this scenario the company would have a lower level of retained earnings which would reduce the amount of additional funds needed.
III. Under this scenario the company would have a lower level of retained earnings but this would have no effect on the amount of additional funds needed.
IV. Under this scenario the company would have a higher level of retained earnings which would reduce the amount of additional funds needed.
V. Under this scenario the company would have a higher level of retained earnings which would increase the amount of additional funds needed.

Problem 12-02. AFN Equation
Baxter Video Products' sales are expected to increase by 20% from $5 million in 2010 to $6 million in 2011. Its assets totaled $4 million at the end of 2010. Baxter is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2010, current liabilities were $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accruals. The after-tax profit margin is forecasted to be 7%, and the forecasted payout ratio is 60%. What would be the additional funds needed if the company's year-end 2010 assets had been $4 million? Assume that the company is operating at full capacity. Round your answer to the nearest dollar.
$
What would be the additional funds needed if the company's year-end 2010 assets had been $3 million? Is the company's "capital intensity" ratio the same or different?

I. The capital intensity ratio is measured as A*/S0. This firm's capital intensity ratio is higher than that of the firm with $3 million year-end 2010 assets; therefore, this firm is more capital intensive - it would require a large increase in total assets to support the increase in sales.
II. The capital intensity ratio is measured as A*/S0. This firm's capital intensity ratio is lower than that of the firm with $3 million year-end 2010 assets; therefore, this firm is more capital intensive - it would require a large increase in total assets to support the increase in sales.
III. The capital intensity ratio is measured as A*/S0. This firm's capital intensity ratio is higher than that of the firm with $3 million year-end 2010 assets; therefore, this firm is less capital intensive - it would require a smaller increase in total assets to support the increase in sales.
IV. The capital intensity ratio is measured as A*/S0. This firm's capital intensity ratio is lower than that of the firm with $3 million year-end 2010 assets; therefore, this firm is more capital intensive - it would require a smaller increase in total assets to support the increase in sales.

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"We must plan for the future," said Vicky. "I think we've been
playing it by ear for too long." Mason immediately called the treasurer,
Jim Moroney. "Jim, I need to know how much additional funding we are
going to need for the next year," said Mason. "The growth rate of
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Jim knew that his fishing plans for the weekend had better be put
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I attached the financial statements.

Need to see and understand each calculation and show all work

2. If Oats 'R' Us is operating its fixed assets at full capacity,
what growth rate can it support without the need for any
additional external financing?

3. Oats 'R' Us has a flexible credit line with the Midway Bank.
If Mason decides to keep the debt-equity ratio constant, up to
what rate of growth in revenue can the firm support? What
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growth? Are these assumptions realistic in the case of Oats
'R' Us? Please explain.

4. Initially Jim assumes that the firm is operating at full
capacity. How much additional financing will it need to
support revenue growth rates ranging from 25% to 40% per
year?

5. After conducting an interview with the production manager,
Jim realizes that Oats 'R' Us is operating its plant at 90%
capacity, how much additional financing will it need to
support growth rates ranging from 25% to 40%?

6. What are some actions that Mason can take in order to
alleviate some of the need for external financing? Analyze
the feasibility and implications of each suggested action.

7. How critical is the financial condition of Oats 'R' Us? Is
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financial planning? Explain why.

8. Given that Mason prefers not to deviate from the firm's 2004
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