Muffins, Inc. generated $10,000,000 in sales duing 2012, and its year-end total assets were $5,000,000. Also, at year-end 2012, current liabilities were $2,000,000, consisting of $600,000 of notes payable, $1,000,000 of accounts payable, and $400,000 of accruals. Looking ahead to 2013, the company estimates that its assets must increase at the same rate as sales, it spontaneous liabilities will increase at the same rate as sales, its profit margin will be 15%, and its payout ratio will be 7%.

a. Derive the self-supporting growth ratio from the AFN equation.

b. What is the self-supporting fgroth rate in the above problem?