Account	Amount (K)
Noncurrent assets	140,000
Inventory	30,000
Accounts Receivables	28, 000
Bank	5,000
Total Assets	203,000
Accounts payables	12,000
Notes payables	15,000
8% Loan	50,000
Ordinary share capital	100,000
Retained profits	26,000
Total liabilities and Equity	203,000

Table 2: Income statement for 2021

Account	Amount (K)
Sales Less cost of sales	280,000 (210,000)
Gross Profit Less: Administration expenses	70,000 46,000
Net Profit (Earnings before tax) Less: Interest on loan	24,000 4,000
Earnings before tax Less tax (30%)	20,000 6,000
Net income Less: Dividend Retained earnings	14,000 5,000 9,000

Supposing that the 2022 sales are projected to increase by 25% over the year 2021 sales and that there is proportional relationship between sales to operating costs, interest expenses, current assets and spontaneous liabilities. The company has been operating at full capacity and planned to maintain the dividend ratio and profit margin position of the previous year.

Required

1. Using the Percentage of Sales method, compute the additional funds needed (AFN), assuming that the company was operating at full capacity in the year 2021. (8 Marks)

2. Using the Formula method, compute the additional funds needed, assuming that the company was operating at full capacity in the year 2021. (4 Marks)