A firm's financial statements for the current year are as follows (in millions of dollars).

Balance Sheet

AssetsLiabilities and Equity

Cash$0.5Accounts Payable$0.4

Accounts Receivable0.7Accrued Liabilities0.2

Inventory0.4Notes Payable0.3

Current Assets1.6Current Liabilities0.9

Net Fixed Assets2.5Long-term Debt1.7

Common Equity1.5

Total4.1Total4.1

Income Statement

Sales$ 10.0

Cost of Goods Sold6.6

Gross Profit3.4

Operating Expenses2.1

Net Operating Income1.3

Interest Expenses0.3

Earnings before Taxes1.0

Income Taxes0.4

Net Income0.6

The management believes that sales will increase by 20 percent next year. The dividend payout ratio (Dividends / Net income) is targeted at 30 percent.The tax rate is 40%.The firm is operating at its full capacity, and therefore it will have to increase its fixed asset accordingly.What is the additional funding requirement for the next year (after the first step of financial planning)?

In the above question, what if the company has a more than enough capacity? How much external fund will be required if the company does not have to increase its fixed asset (the first step of financial planning)?