Refer to the Judd Enterprises financial statements. What is Judd's projected retained earnings under this plan?
These are the simplified financial statements for Judd Enterprises.
Income statement	Current	Projected
Sales	na	1,000
Costs	na	720
Profit before tax	na	280
Taxes (25%)	na	70
Net income	na	210
Dividends	na	63
Balance sheets	Current	Projected			Current	Projected
Current assets	100	115		Current liabilities	70	81
Net fixed assets	900	1,080		Long-term debt	400
				Common stock	300
				Retained earnings	230

In your internship with Lewis, Lee, & Taylor Inc. you have been asked to forecast the firm's additional funds needed (AFN) for next year. The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?

Last year's sales = S0	$200,000	Last year's accounts payable	$50,000
Sales growth rate = g	40%	Last year's notes payable	$15,000
Last year's total assets = A0*	$137,500	Last year's accruals	$20,000
Last year's profit margin = PM	20.0%	Target payout ratio	25.0%

You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, & Worthington (HHW), which is planning its operation for the coming year. The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 90%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.

Last year's sales = S0	$300.0	Last year's accounts payable	$50.0
Sales growth rate = g	40%	Last year's notes payable	$15.0
Last year's total assets = A0*	$500	Last year's accruals	$20.0
Last year's profit margin = PM	20.0%	Initial payout ratio	10.0%