Blue Elk Manufacturing reported sales of $720,000 at the end of last year, but this year, sales are expected to grow by 7%. Blue Elk expects to maintain its current profit margin of 21% and dividend payout ratio of 30%. The following information was taken from Blue Elks balance sheet: Total assets: $400,000 Accounts payable: $80,000 Notes payable: $35,000 Accrued liabilities: $70,000 Based on the AFN equation, the firms AFN for the current year is _________.

a. -86,174

b. -105,324

c. -95,749

d. -100,536

Because of its excess funds, Blue Elk Manufacturing is thinking about raising its dividend payout ratio to satisfy shareholders. Blue Elk could pay out _______% of its earnings to shareholders without needing to raise any external capital. (Hint: What can Blue Elk increase its dividend payout ratio to before the AFN becomes positive?)

a. 71.4%

b. 89.2%

c. 75.8%

d. 62.4 %