7. Africagrowth Ltd. expects rapid sales growth next year. Sales for the current year were US$8 million, and are expected to grow by 15 % next year.

Africagrowth Ltd. wants to estimate the external capital that will be required to finance this growth. The company estimates that additional assets equal to 25 % of the increase in sales will be required. Liabilities will increase by 20 % of sales. The net profit margin is 5 % and Africagrowth Ltd. expects to pay US$50,000 in dividends to its ordinary shareholders.

Compute the external capital required by Africagrowth Limited.