Solved

Blockbuster Is a North American Video and DVD Sales and Rental

Question 66

Multiple Choice

Blockbuster is a North American video and DVD sales and rental chain. Use the equation approach and Blockbuster's financial statement for Year 2 to calculate additional funds needed (AFN) in Year 3. Assume that sales in Year 3 will be $5.67336 billion. Assume a 0% dividend payout rate. Blockbuster Inc.
Income Statement and Balance Sheet
As of December 31, Year 2 ($000's)
 Revenue $5,157,600 COGS 2,420,700 SG&A 2,708,500 Dep. Exp. 246,600 EBIT 218,200 Int. Exp. 78,200 Income Before Tax 296,400 Income Taxes 56,100 Net Income $240,300 ASSETS  Total Current Assets 716,400 PP&E 909,000 Goodwill 6,127,000 Total Assets $7,752,400 LIABILITIES AND OWNERS  EQUITY  Total Current Liabilities 1,268,800 Long Term Debt 734,900 Total Liabilities $2,003,700 Owners Equity  Common Stock 6,075,800 Retained Earnings 327,100 Total Stockholder Equity 5,748,700 Total Liabilities and Owners  Equity $7,752,400\begin{array} { | c | c | } \hline \text { Revenue } & \$ 5,157,600 \\\hline \text { COGS } & 2,420,700 \\\hline \text { SG\&A } & 2,708,500 \\\hline \text { Dep. Exp. } & 246,600 \\\hline \text { EBIT } & - 218,200 \\\hline \text { Int. Exp. } & 78,200 \\\hline \text { Income Before Tax } & - 296,400 \\\hline \text { Income Taxes } & - 56,100 \\\hline \text { Net Income } & - \$ 240,300 \\\hline \text { ASSETS } & \\\hline \text { Total Current Assets } & 716,400 \\\hline \text { PP\&E } & 909,000 \\\hline \text { Goodwill } & 6,127,000 \\\hline \text { Total Assets } & \$ 7,752,400 \\\hline \text { LIABILITIES AND OWNERS } & \\ \text { EQUITY } & \\\hline \text { Total Current Liabilities } & 1,268,800 \\\hline \text { Long Term Debt } & 734,900 \\\hline \text { Total Liabilities } & \$ 2,003,700 \\\hline \text { Owners Equity } & \\\hline \text { Common Stock } & 6,075,800 \\\hline \text { Retained Earnings } & - 327,100 \\\hline \text { Total Stockholder Equity } & 5,748,700 \\\hline \text { Total Liabilities and Owners } & \\\text { Equity } & \$ 7,752,400 \\\hline\end{array}


A) -$225.363 million
B) $63.243 million
C) $125.363 million
D) $189.900 million
E) $299.990 million

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents