Problem:
Broussard Skateboard's sales are expected to increase by 25% from $8.6 million in 2013 to $10.75 million in 2014. Its assets totaled $6 million at the end of 2013. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2013, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 55%.
Required:
What would be the additional funds needed?
Note: Please provide through step by step calculations.