AFN EQUATION Carlsbad Corporation's sales are expected to increase from $5 million in 2016 to $6 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 abilities 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 these assumptions, who would be the additional funds needed for the coming year> write out your answer completely. For example, 5 million should be entered as . b. Why is this AFN different from the one when the company poys dividenda? 1. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of assets needed 11. Under this scenario the company would have a higher level of spontaneous abilities, which would reduce the amount of additional funds needed m. Under this scenario the company would have a lower level of retained earnings, which would increase the amount of addition Funds needed TV. Under this scenarto the company would have a lower level of retained earnings, which would decrease the amount of 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 FI Problem Walk-Through AFN EQUATION Carlsbad Corporation's sales are expected to increase from $5 million in 2016 to $6 million in 2017, or by 20%. Its assets totaled $4 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 in forecasted to be 3%, and the forecasted retention ratio is 40%. Use the AFN equation to forecast the additional funds Carlsbad will need 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