1. ABC Inc. has the following balance sheet and income statement:

Balance Sheet

Assets		Liabilities & Equity
Cash	$10	Accts. Pay. & Accruals	$50
Accts. Receivable	$140	Total Cur. Liabilities	$50
Inventories	$200	Long-Term Debt	$250
Total Cur. Assets	$350	Total Liabilities	$300
Net Fixed Assets	$250	Common Stock	$200
Total Assets	$600	Retained Earnings	$100
		Total Common Equity	$300
		Total Liab. & Equity	$600

Income Statement

Sales	$1,200
Operating Costs (excluding depreciation)	$875
Depreciation	$25
EBIT	$300
Interest	$50
Pretax Earnings	$250
Taxes (40%)	$100
Net Income	$150

Using the DuPont System, calculate the Return on Equity of ABC: ROE = ? ? ?

4. You have the following data for ABC Inc.

Total Assets	$10,000,000
Spontaneous Liabilities	$200,000
Sales	$20,000,000
Forecasted Sales for the Coming Year	$23,000,000
Profit Margin	8%
Dividend Payout Ratio	60%

Using the Additional Funds Needed (AFN) equation, calculate the additional funds that will be needed by ABC next year.