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Problem $12-01$

AFN equation

Broussard Skateboard's sales are expected to increase by $20\%$ from $$8\mathrm{.}8$ million in $2016$ to $$10\mathrm{.}56$ million in $2017.$ Its assets totaled $$3$ million at the end of $2016.$ Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of $2016,$ current liabilities were $$1\mathrm{.}4$ million, consisting of $$450,000$ of accounts payable, $$500,000$ of notes payable, and $$450,000$ of accruals. The after$-$tax profit margin is forecasted to be $5\%,$ and the forecasted payout ratio is $75\%.$ Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Round your answer to the nearest dhiar. Do not round intermediate calculations.

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