9-6: Additional Funds Needed (AFN) Equation Method Problem 9-7 Forecasted Statements and Ratios arehouses ships them to its chain of etail stores, and has ? staff to advise customers and help the set up thei new computers Upton's balance sheet Upton Computers makes bul purchases of s nal computers, stocks them in conveniently located as of December 31, 2015, is shown here (millions of dollars): $ 9.0 18.0 Cash S 3.5 Accounts payabke 26.0 Notes payabe 8.0 Line of credit Inventories Total current assets Net fixed assets $87.5 Accruals s35.5 6.0 15.0 66.0 $122.5 35.0 Total current liabilities Mortgage loan Common stock Retained earnings Total assets $122.5 Total iabilities and equity Sales for 2015 were $250 milion and net income or the year as 57.5 milion so the firm's profit margin was 3.0% Upton paid dividends of $3 million to com mon stockholders, so its payout atio was 40% its tax rate is 40% and it operated at full capacity. Assume that all assets/sales ratios, spontaneous liabilities/sales ratios, the profit margin, and the payout ratio remain constant in 2016. Do not round intermediate calculations. a. If sales are projected to increase by $60 milion, or 24% during 2016 use the AFN equation to determine Upton's pro ected external capital equirements. Enter your ans er n millions. For example an answer of?1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. million b. Using the AFN equation, determine Upton's self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? Round your answer to two decimal places c. Use the forecasted financial statement method to forecast Upton's balance sheet for December 31, 2016, Assume that all additional external capital is raised as a ine of credit at the end of the year and is reflected (because the debt is added at the end of the year, there will be no additional interest expense due to the new debt) Assume Upton's profit margin and dividend payout ratio will be the same in 2016 as they were in 2015. What is the amount of the line of credit reported on the 2016 forecasted balance sheets? (Hint: You don't need to forecast the income statements because you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2016 addition to retained earnings for the balance sheet.) Round your answers to two decimal places. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000