Refer the following statements and attempt to answer the given questions: i) Calculate ROE using DuPont Formula (given below): ROE = NI/S times S/TA times TA/E ii) Compute XYZ's AFN (additional funds requirements) using AFN equation method. The following assumptions are to be taken into account while calculating AFN: Operating at full capacity in 2015 Sales are expected to increase by 15% ($300 million). Asset-to-sales ratios remain the same. Spontaneous-liabilities-to-sales ratio remains the same. 2015 profit margin ($24/$2,000 = 1.2%) and payout ratio (37.5%) will be maintained. Important definitions of variables in AFN equations: A*_0/S_0: Assets required supporting sales: called capital intensity ratio. delta S: Increase in sales. L*_0/S_0: Spontaneous liabilities ratio. M: Profit margin (Net income/Sales) POR: Payout ratio (Dividends/Net income) A* = Assets tied directly to sales and will increase L* = Spontaneous liabilities that will be affected by sales. S0 = Sales during the last year S1 = Total sales projected for next year (the new level of sales). delta S = The increase in sales between S0 and S1 M = Profit margin, or the profit per unit of sales MS1 = Projected Net Income RR = The retention ratio from Net Income and is also calculated as (1 - payout ratio) The relevant ratios within the formula are: (A*/S0): Called the capital intensity ratio (L*/S0): Called the spontaneous liabilities ratio