solve

Carlsbad Corporation's sales are expected to increase from $5 million in 2021 to $6 million in 2022, or by 20%. Its assets totaled $3 million at the end of 2021. Carlsbad is at full capacity, 50 its assets must grow in proportion to projected sales. At the end of 2021, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued itabilities, Its profit margin is forecasted to be 6%. a. Assume that the company pays no dividends. Use the AFN equation to forecast the additional funds Carisbad will need for the coming yeac. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round vour answer to the nearest dollar. 3 b. Why is this AFN different from the one when the company pays dividends? 1. Under this scenario the company would have a lower level of retained earnings, which would decrease the amount of additional funds needed. 11. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of additional funds nesded. 111. Under this scenario the company would have a higher level of retained earnings, which woty reduce the amount of assets needed. IV. Under this scenario the company would have a higher level of spontaneous liabilities, which would reduce the amount of additional funds needed. V. Under this scenario the cormpany would have a lower level of retained earnings, which would increase the amount of additional funds neoded