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2. This firm recently reported sales of $250 million, and net income equal to $13 million. The company has $100 million in total assets. Over
2. This firm recently reported sales of $250 million, and net income equal to $13 million. The company has $100 million in total assets. Over the next year, the company is forecasting a 40 percent increase in sales. Since the company is at full capacity, its assets must increase in proportion to sales. The company also estimates that if sales increase 40 percent, spontaneous liabilities will increase by $15 million. If the company's sales increase, its profit margin will remain at its current level. The company's dividend payout ratio is 60 percent. Based on the AFN formula, how much additional capital must the company raise in order to support the 40 percent increase in sales
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