Cold Duck Manufacturing Inc. has the following end$-$of$-$year balance sheet:

Cold Duck Manufacturing Inc.

Balance Sheet

For the Year Ended on December $31$

The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended,

Cold Duck Manufacturing Inc. generated $$300,000$ net income on sales of $$13,500,000.$ The firm expects sales to increase by $19\%$ this coming year

and also expects to maintain its long$-$run dividend payout ratio of $40\%.$

Questions:

$1.$Suppose Cold Duck Manufacturing Inc.$$s assets are fully utilized. Use the additional funds needed $($AFN$)$ equation to determine the increase in total assets that is necessary to support Cold Duck Manufacturing Inc.$$s expected sales?

$2.$ When a firm grows, some liabilities grow spontaneously along with sales. Spontaneous liabilities are a source of capital that the firm will generate internally, so they reduce the need for external capital. How much of the total increase in assets will be supplied by spontaneous liabilities for Cold Duck Manufacturing Inc. this year?

$3.$ In addition, Cold Duck Manufacturing Inc. is expected to generate net income this year. The firm will pay out some of its earnings as dividends but will retain the rest for future asset investment. Again, the more a firm generates internally from its operations, the less it will have to raise externally from the capital markets. Assume that the firm$$s profit margin and dividend payout ratio are expected to remain constant.

Given the preceding information, Cold Duck Manufacturing Inc. is expected to generate $\_\_\_\_\_$ from operations that will be added to retained earnings.

According to the AFN equation and projections for Cold Duck Manufacturing Inc., the firm$$s AFN is $\_\_\_\_\_.$