Click here to read the eBook: The AFN Equation 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 53 million at the end of 2016. Carlsbad is at 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 note payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 6% a. Assume that the company pays no dividends. Under these assumptions, what would be the additional funds needed for the coming year? Write out your answer completely. For example, 5 milion should be entered as 5,000,000. Round your answer to the nearest cent b. Why is this AFN different from the one when the company pays dividends? L. Under this scenario the company would have a lower level of retained earnings, which would decrease the amount of additional funds needed II. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of additional funds needed III. Under this scenario the company would have a higher level of reta carnings, which would reduce the amount of assets needed. IV. Under this scenario the company would have a higher level of spontaneous abies, which would reduce the amount of additional funds needed. V. Under this scenario the company would have a lower level of retained earnings, which would increase the amount of additional funds needed. Select Grade it Now Save & Continue Back to Assignment Anning and Forecasting Attempts 3. Problem 16.03 Keep the Highest: 12 Click here to read the eBook: The AFN Equation 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 53 milion the end of 2016. Carlsbad apacity, 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, 1500,- yable, and $250,000 of accrued abilities. Its profit margin is forecasted to be 6%. a. Assume that the company pays no dividends. Under these assumptions, what would be the additional funds needed for the coming year? Write out your answer completely. For example, 5 million should be 5,000,000. Round your answer to the nearest cent. b. Why is this AFN different from the one when the company pays dividends? 1. Under this scenario the company would have a lower level of retained earnings, which would decrease the amount of additional funds needed II. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of additional funds neeond. m. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of assets needed. IV. Under this scenario the company would have a higher level of spontaneous liabilities, which would reduce the amount of additional funds needed V. Under this scenario the company would have a lower level of retained earnings, which would increase the amount of additional funds needed. -Select- Grade it Now Save & Continue Continue without saving