Additional Funds Needed The Booth Company’s sales are forecasted to double from $1,000 in 2021 to…

Additional Funds Needed

The Booth Company’s sales are forecasted to double from $1,000
in 2021 to $2,000 in 2022. Here is the December 31, 2021, balance
sheet:

Cash $ 100

Accounts payable $ 50

Accounts receivable 200

Notes payable 150

Inventories 200

Accruals 50

Net fixed assets 500

Long-term debt 400

Common stock 100

Retained earnings 250

Total assets $1,000

Total liabilities and equity $1,000

Booth’s fixed assets were used to only 50% of capacity during
2021, but its current assets were at their proper levels in
relation to sales. All assets except fixed assets must increase at
the same rate as sales, and fixed assets would also have to
increase at the same rate if the current excess capacity did not
exist. Booth’s after-tax profit margin is forecasted to be 8% and
its payout ratio to be 40%. What is Booth’s additional funds needed
(AFN) for the coming year? Hint: Forecast next year’s financial
statements. Forecast fixed assets taking into account the current
year’s capacity level and assuming you’d use up this excess
capacity before adding fixed assets. Round your answer to the
nearest dollar. $