AFN EQUATION Carlsbad Corporation's sales are expected to increase from $5 milion in 2016 to $5 million in 2017, or by 20%. Its assets totaled $3 million at the end of 2016. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2016, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 5% a. Assume that the company pays no dividends. Under there anaumption, what would be the additional funds needed for the coming year? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent b. Why is this Arn different from the one when the company pays dividends? 1. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of assets needed. II. Under this scenario the company would have a higher level of spontaneous abilities, which would reduce the amount of additional funds needed. III. Under this scenario the company would have a lower level of retained earnings, which would increase the amount of additional funds needed IV. Under this scenario the company would have a lower level of retained earnings, which would decrease the amount or additional funds needed V. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of additional funds needed