6. The Additional Funds Needed (AFN) equation Green Moose Industries has the following end-of-year balance sheet: Green Moose Industries Balance Sheet For Year Ended on December 31 Assets Current Assets Cash and equivalents Accounts receivable Inventories Total Current Assets Net Fixed Assets Net plant and equipment (cost minus depreciation) $150,000 400,000 350,000 $900,000 Liabilities Current Liabilities: Accounts payable Accrued babilities Notes payable Total Current Liabilities Long-Term Bonds $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 $2,100,000 Total Debt Common Equity Common stock 800,000 Retained earnings 700,000 Total Common Equity $1,500,000 Total Liabilities and Equity $3,000,000 Total Assets $3,000,000 The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year in the year that just ended, Green Moose Industries generated $500,000 net income on sales of $12,500,000. The firm expects sales to increase by 19% this coming year and also expects to maintain its long-run dividend payout ratio of 30% The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, Green Moose Industries generated $500,000 net income on sales of $12,500,000. The firm expects sales to increase by 19% this coming year and also expects to maintain its long-run dividend payout ratio of 30% Suppose Green Moose's assets are fully utilized. Using the additional funds needed (AFN) equation, the increase in total assets that is necessary to support Green Moose Industries's expected sales is S (Hint: Do not round intermediate calculations.) When a firm grows, some liabilities grow spontaneously along with sales. Spontaneous liabilities are a source of capital that the firm will generate internally, so they reduce the need for external capital. How much of the total increase in assets will be supplied by spontaneous liabilities for Green Moose this year? (Hint: Do not round intermediate calculations.) $76,000 $60,000 $64,600 $79,500 Now, Green Moose expects to generate a positive net income next year, and to distribute some of its earnings as dividends. It will retain the remainder of the firm's forecasted net income (es retained earnings) for future asset investment. As the company generates more internal funding, it will have less to raise externally via the capital markets. Assuming that, next year, Green Moose's net profit margin and dividend payout ratio will be the same as this year's values, then Green Moose is expected to generates of additional retained earnings financing (Hint. Do not round intermediate calculations.) in According to the financial forecasts for Green Moose Industries and the AFN equation, next year, the firm will need to raise $ additional external financing (Hint: Do not round intermediate calculations)