Chapter 12: Financial Planning and Forecasting Financial Statements Baldwin Products Company anticipates reaching a sales increasing by 10% next year. The company expects expenses as a percentage of sales to be the same as last year. During the past several years, the company has been paying $50,000 in dividends to its stockholders and the company expects to continue this policy for at least the next year. Assume that the firm is operating at full capacity. The actual balance sheet and income statement for Baldwin during 2010 follow: Baldwin Product Company Balance Sheet as of December 31, 2010 Actual Cash $200,000 Accounts Receivable 400,000 Inventories 1,200,000 Fixed assets, net 500,000 Total assets $2,300,000 Accounts payable $600,000 Notes payable 500,000 Long-term debt 200,000 Stockholders' equity 1,000,000 Total liabilities and equity $2,300,000 Income Statement-Year Ending December 31, 2010 Sales $4,000,000 Expenses, including interest and taxes $3,700,000 Earnings after taxes $300,000 3. What is Baldwin’s AFN if the firm was operating at 80% capacity?