Formula :-
=Estimate Sales X Profit Margin x Plowback Ratio
Plowback Ratio= 1- payout Ratio
Payout Ratio = Dividend / Met Income
Payout Ratio : = 960,000/2,400,000 = 0.40
plowback ratio = 1-0.4 = 0.60
=Estimate sales x profit margin x plowback = 8,700,000 x 25% x 0.60 =1,305,000

Formula :-
Estimates Sales x Profit Margin x plowback ratio
plowback ratio = 1- playout ratio
payout ratio = dividend / net income

payout ratio = 1,000,000 / 2,500,000 = 0.40
plowback ratio = 1-0.4 =0.60
=estimate sales x profit margin x plowback ratio = 7,800,000 x 30% x 0.60 = 1,404,000

Re: MGT201 GDB 1 Solution and Discussion

Graded Discussion Board Fall 2020
Financial Management (MGT201)

Dear Students,
This is to inform that Graded Discussion Board (GDB) No. 01 will be opened on December 03, 2020 for discussion and last date for posting your discussion will be December 8, 2020. This Graded Discussion Board will be on the topic of “Financial Forecasting and Financial Planning”

Short Demo:
If you want to know how to attempt a GDB on VULMS, watch the following short demo on VU Facebook page.

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Note:
For acquiring the relevant knowledge, do not rely only on handouts but also watch the course video lectures and read additional material available online or in any other mode.
Important Instructions:
Your discussion must be based on logical facts.
The GDB will open and close on above specified date and time. Please note that no grace day or extra time will be given for posting comments on GDB.
Use the font style “Times New Roman” and font size “12”.
Your answer should be relevant to the topic i.e. clear and concise.
Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references.
You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed.
Obnoxious or ignoble answer should be strictly avoided.
You cannot participate in the discussion after the due date via email.
Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.
For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VU-LMS.

Best of Luck!!

Discussion Topic: “Financial Forecasting and Financial Planning”

Discussion Question:

Forecasting is the essence of financial matters and prominent characteristic of finance manager. Accuracy, along with the validity of forecasting method is getting attention from the financial press. Suppose you are working in the finance department of a well-reputed organization. Management of the company has given you two alternative projects and assigned you a task to select the better one on the basis of Expected Estimated Retained Earnings.

Following information has been provided about two projects by the management

Requirements:

Calculate expected estimated retained earnings of both projects.
Based on the calculations, which project you will suggest and why? (Your selection should be supported with logical reasoning)
Note: Complete Calculations and formulas are mandatory; marks will be deducted upon providing the answers only).