Carlsbad Corporation's sales are expected to increase from $$5$ million in $2021$ to $$6$ million in $2022,$ or by $20\%.$ Its assets totaled $$3$ million at the end of $2021.$ Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of $2021,$ current liabilities are $$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 $7\%,$ and the forecasted retention ratio is $30\%.$ 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 dollar.

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What additional funds would be needed if the company's year$-$end $2021$ assets had been $$4$ million? Assume that all other numbers are the same. Write out your answer completely. For example, $5$ million should be entered as $5,000,000.$ Round your answer to the nearest dollar.

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Is the company's "capital intensity" the same or different comparing to initial situation?

The firm's capital intensity ratio in the new situation

$-$Selecthat in the initial one.

higher than

lower than

the same as