What are the additional funds needed in Year 3?а.-$225.363 millionb.$63.243 millionC.$125.363 milliond.$189.900 millionе.$299.990 million Blockbuster is a North American video and DVD sales and rental chain. Forecastthe financial statements for Blockbuster for Year 3. Use the percent of salesmethod based on Year 2 and the assumptions listed below. Please note theratios to sales provided in the table which are useful for making the forecast. Inthe event that taxable income is negative, calculate taxes in the usual way.Negative taxes can be interpreted as a tax refund.Sales growth of 10%. The cost of debt is 7.5%. The tax rate is 35%. Thedepreciation rate is 25%. CAPEX is $200M. The following accounts are heldconstant: Goodwill and Common Stock. Long-term debt is the PLUG account.No dividends.Blockbuster Inc.Income Statement and Balance SheetAs of December 31, Year 2 ($000's)Year 2RatiosForecastRevenue$5,157,600$5,673,360COGS2,420,7000.469346SG&A2,708,5000.525147Dep. Exp.246,600ЕBIT-218,200Int. Exp.78,200Income before Tax-296,400Income Taxes-56,100Net Income-$240,300ASSETSTotal Current Assets716,4000.138902PP&E909,000Goodwill6,127,0006,127,000Total Assets$7,752,400LIABILITIES AND OWNERS'EQUITYTotal Current Liabilities1,268,8000.246006Long-Term Debt734,900Total Liabilities$2,003,700Owners' EquityCommon Stock6,075,8006,075,800Retained Earnings-327,100Total Stockholder Equity5,748,700Total Liabilities andOwners' Equity7,752,400

AFN stands for Additional Funds Needed, which is a financial metric used to determine the amount of…

Answered: What are the additional funds needed in…

What are the additional funds needed in Year 3? a. -$225.363 million b. $63.243 million C. $125.363 million d. $189.900 million e. $299.990 million

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 3P

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