2. AFN Equation Due to a change in demand for its products, Microdot Ltd is expecting to expand hugely in the year starting today. Up until now, fixed assets have only been utilised at 80 percent of total capacity. Therefore the chief financial officer needs to determine what additional funds Microdot Ltd will need to raise by the end of the current year. Microdot's sales, last year, were $95 million and the expected growth rate for sales in the current year is 45 percent. All sales are credit sales, Microdot Ltd's net profit margin is 8 percent, and 40 percent of net profit after tax (NPAT or NI) will be paid out as a dividend. Microdot Ltd faces, in the coming year, two severe restrictions on its exibility: the company's debt ratio must not exceed 55% and the current ratio may not fall below 2. The balance sheet Microdot Ltd for the year that ended this morning is: Cash , 5,000,000 Accounts Receiviahle 19,000,000 Inventory i 17,000, 000 . Current Assets , 41,000,000] Fixed Assets 40,000, 000' Accumulated Depreciation ; 3,000,000 Net titted Assets ! 37,000,000 Total Assets 73,000,000 Accounts Payable 10,000,000 .09??? 9010.10? .1 8.990.099. Accmed Wages etc 3,000,000 -l Cun'ent Liabilities , 20,000,000 Long term debt 5 20,000,000 Total Liabilities ' 40,000,000 Ordinary shares 22,500, 000' Retained Earnings f 15,500, 000 Total Equities i 38,000,000 Total Liabilities and 0E 73,000,000