A Firm Has the Following Balance Sheet

Multiple Choice

A firm has the following balance sheet:
Cash:$ 20
Accounts payable:$ 20
Accounts receivable:20
Notes payable:40
Inventory:20
Long-term debt:80
Fixed assets:180
Common stock:80
Retained earnings:20
Total assets:$240
Total liabilities and equity:$240
Sales for the year just ended were $400,and fixed assets were used at 80 percent of capacity,but its current assets were at optimal levels.Sales are expected to grow by 5 percent next year,the profit margin is 5 percent,and the dividend payout ratio is 60 percent.How much additional funds (AFN) will be needed?

A) $4.6
B) −$6.4 (Surplus)
C) $2.4
D) −$4.6 (Surplus)
E) $0.8