Question:
A firm has the following balance sheet:
Cash $20
Accounts receivable $20
Inventory $20
Common stock $80
Accounts payable $20
Notes payable $40
Long-term debt $80
Fixed assets $180
Total assets $240
Retained earnings $20
Total liabilities and equity $240
Sales for the year just ended were $400, and fixed assets were used at 80 percent of capacity, but its current assets were at optimal levels. Sales are expected to grow by 5 percent next year, the profit margin is 5 percent, and the dividend payout ratio is 60 percent. How much additional funds (AFN) will be needed?