1a. Lifestyle Retails (LR) sales are expected to increase from $8 million in 2022 to $10 million in 2023. Its assets totalled $5 million at the end of 2022. LR is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2022, current liabilities were $1.6 million, consisting of $550,000 of accounts payable, $600,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 30%. Use the AFN equation to forecast LR's additional funds needed for the coming year.

1b. Refer to problem 1a. What would be the additional funds needed if the company's year end 2022 assets had been $7 million and we assume now that LR pays no dividends? Assume that all other numbers, including sales, are the same as problem 17 and that the company is operating at full capacity, Under these assumptions, what would be the additional funds needed for the coming year? Enter your answer rounded to two decimal places.