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CN Railways Is North America's Fifth Largest Railway

Question 30

Multiple Choice

CN Railways is North America's fifth largest railway.Forecast the financial statements for CN for Year 11.Use the percent of sales method based on Year 10 and the assumptions listed below.Please note the ratios to sales provided in the table which are useful for making the forecast.
Sales growth of 10%.The cost of debt is 4.59%.The tax rate is 31.943%.The depreciation rate is 3%.CAPEX is $1,600 Million.The following accounts are constant: Intangible assets,Deferred taxes,and Common Stock.Long term debt is the PLUG variable.No dividends.
Forecast the financial statements for CN.What are the additional funds needed (AFN) in Year 11? The AFN is the change in the plug account from Year 10 to Year 11.
CN Railway Company
Income Statement and Balance Sheet
As of December 31,Year 10 ($ 000,000's)
CN Railways is North America's fifth largest railway.Forecast the financial statements for CN for Year 11.Use the percent of sales method based on Year 10 and the assumptions listed below.Please note the ratios to sales provided in the table which are useful for making the forecast. Sales growth of 10%.The cost of debt is 4.59%.The tax rate is 31.943%.The depreciation rate is 3%.CAPEX is $1,600 Million.The following accounts are constant: Intangible assets,Deferred taxes,and Common Stock.Long term debt is the PLUG variable.No dividends. Forecast the financial statements for CN.What are the additional funds needed (AFN) in Year 11? The AFN is the change in the plug account from Year 10 to Year 11. CN Railway Company Income Statement and Balance Sheet As of December 31,Year 10 ($ 000,000's)    A)  $64 million B)  $165 million C)  $342 million D)  $580 million E)  $965 million


A) $64 million
B) $165 million
C) $342 million
D) $580 million
E) $965 million

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