ABC Industries is planning its operations for next year, and the CEO has hired you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. What is the AFN for the coming year?

Last years sales = $600m

Last years accounts payable = $115m (This account changes spontaneously with sales)

Sales growth rate = 5%

Last years notes payable = $80m (This account does not change spontaneously with sales)

Last years total assets = $820m (Total assets change spontaneously with sales)

Last years profit margin = 5%

Target dividend payout ratio = 40%

What is the AFN for the coming year?

a. $16,350,000

b. $9,305,000

c. $6,905,000

d. $3,382,500