Question:Holcomb and Cromworthy are forecasting a 10% increasein sales next year.Assume the company is operating at 90% capacity. The company has 100,000 shares of common stock outstanding and dividends are $0.22 per share.

At 90% capacity what level will sales have to reach for the discretionary items to become spontaneous that is move in direct proportion to sales?

Compute the new level of net income for the company

.

Compute the company's additional retained earnings for the year

Compute the new level of total assets required

Calculate the new level of current liabilities

Compute the company's new level of retained earnings on the balance sheet

Calculate the level of Additional Funds Needed (AFN) to support the increase in sales