Lan & Chen Technologies: Income Statements for Year Ending December 31
(Thousands of Dollars)				2020	2019
Sales				$995,000	$950,000
Operating costs excluding depreciation and amortization				810,000	750,000
EBITDA				$185,000	$200,000
Depreciation				35,600	32,500
EBIT				$149,400	$167,500
Interest Expense				15,000	8,600
EBT				$134,400	$158,900
Taxes (40%)				53,760	63,560
Net income				$80,640	$95,340
Lan & Chen Technologies: December 31 Balance Sheets
(Thousands of Dollars)
Assets		2020				2019
Cash		$45,250				$43,000
Short-term investments		4,800				3,200
Accounts Receivable		280,000				275,000
Inventories		151,000				171,000
Total current assets		$481,050				$492,200
Net fixed assets		430,750				415,000
Total assets		$911,800				$907,200
Liabilities and equity
Accounts payable		$96,500				$95,000
Accruals		49,250				46,000
Notes payable		36,500				29,000
Total current liabilities		$182,250				$170,000
Long-term debt		71,710				90,000
Total liabilities		$253,960				$260,000
Common stock		522,200				522,200
Retained Earnings		135,640				125,000
Total common equity		$657,840				$647,200
Total liabilities and equity		$911,800				$907,200

The firm reported the balance sheet and income statement in Question 1. Sales were $995,000 in 2020, and the firm plans to increase sales by 15% in 2021. The firms profit margin is 8.10%, and it pays out 86.81% of its net income in dividends.

a) Calculate the firms additional funds needed (AFN) for the next year.

b) Assume that the firms CEO does not want to issue any new debt or equity. In other words, the firms management does not want any new external financing. What is the firms growth rate without any external financing?

c) State one possible reason why the firms CEO does not want to get new external financing. (1-2 sentences, you do not need to provide any calculations or numerical answers).

d) Assume that you are the CFO of the firm. Your CEO asked you to provide some possible ways to decrease the firms AFN. Other things held constant, what are two possible ways to decrease the firms AFN? (1-2 sentences, you do not need to provide any calculations or numerical answers).