Suppose Blue Elk's assets are fully utilized. Using the additional funds needed $($AFN$)$ equation, the increase in total assets that is necessary to support Blue Elk Manufacturing's expected sales is

$($Hint: Do not round intermediate calculations.$)$

When a firm grows, some liabilities grow spontaneously along with sales. Spontaneous liabilities are a source of capital that the firm will generate internally, so they reduce the need for external capital. How much of the total increase in assets will be supplied by spontaneous liabilities for Blue Elk this year? $($Hint: Do not round intermediate calculations.$)$

$$64,800$

$$86,400$

$$57,600$

$$72,000$

Now, Blue Elk expects to generate a positive net income next year, and to distribute some of its earnings as dividends. It will retain the remainder of the firm's forecasted net income $($as retained earnings$)$ for future asset investment. As the company generates more internal funding, it will have less to raise externally via the capital markets.

Assuming that, next year, Blue Elk's net profit margin and dividend payout ratio will be the same as this year's values, then Blue Elk is expected to generate of additional retained earnings financing. $($Hint: Do not round intermediate calculations.$)$

According to the financial forecasts for Blue Elk Manufacturing and the AFN equation, next year, the firm will need to raise additional external financing. $($Hint: Do not round intermediate calculations.$)$