1. Estimate the next four years FCF using 2015 actual data. Assume operating ratios remain unchanged from values in most recent year and sales will grow by 10%, 8%, 5%, and 5% for the next four years.

2.Using the given financial statements calculate AFN (Additional Funds Needed) for the next year. Assume sales growth rate is 10%. Also, calculate Self-supporting growth rate of the firm.

Lan & Chen Technologies: Income Statements for Year Ending December 31
(Thousands of Dollars)			2015	2014
Sales			$945,000	$900,000
Operating costs excluding depreciation and amortization			812,700	774,000
EBITDA			$132,300	$126,000
Depreciation			33,100	31,500
EBIT			$99,200	$94,500
Interest Expense			10,470	8,600
EBT			$88,730	$85,900
Taxes (40%)			35,492	34,360
Net income			$53,238	$51,540
Common dividends			$43,300	$41,230
Addition to retained earnings			$9,938	$10,310
Lan & Chen Technologies: December 31 Balance Sheets
(Thousands of Dollars)
Assets			2015	2014
Cash			$47,250	$45,000
Short-term investments			3,800	3,600
Accounts Receivable			283,500	270,000
Inventories			141,750	135,000
Total current assets			$476,300	$453,600
Net fixed assets			330,750	315,000
Total assets			$807,050	$768,600
Liabilities and equity
Accounts payable			$94,500	$90,000
Accruals			47,250	45,000
Notes payable			26,262	9,000
Total current liabilities			$168,012	$144,000
Long-term debt			94,500	90,000
Total liabilities			$262,512	$234,000
Common stock			444,600	444,600
Retained Earnings			99,938	90,000
Total common equity			$544,538	$534,600
Total liabilities and equity			$807,050	$768,600