% of sales/AFN

Alcoa Aluminum shows 2015 revenue of $2,000 with variable costs of $1,200, fixed cots pf $66 (all dollars in thousands, depreciation is included in the variable and fixed costs), and interest paid of $16. Alcoas tax rate is 40%, the dividend payout ratio is 40% and they pay 8% on all shot and long-term debt.

Alcoas balance sheet shows cash of $20, accounts receivables of $260, inventory of $220, net fixed assets of $500. Payables are reported at $100, long-term debt is $150, common stock is $500, retained earnings are $200 and short-term debt is $50. If assets are operating at full capacity, sales are predicted to grow at 20% in 2015 and the dividend payout ratio remains unchanged, find their AFN and apportion any resulting AFN 60% to long-term debt, 40% to short-term debt. Solve for the debt amounts that result and consequently show these incorporated into the 2016 balance sheet. All figures provided are in $K, round all entries to the nearest $K.

If you were to make a second pass to reflect some additional interest paid, how much interest in total would need to be included to recalculate the AFN? What would the new AFN be? What happens when making a third pass at AFN/interest?