Additional External Financing

You  have been running your small business, Craft’s Boat Shop, for several years now  and have been very successful.  You have  come to the point where you expect sales to increase next year and want to be  sure that you have enough assets available to support your sales. You also need  to have the financing available to acquire those assets, if needed.Accordingly,  you have gathered the following data:Craft’s Boat Shop                         Sales Last Year$1,000,000 Assets at the End of Last Year750,000Accounts Payable60,000Notes Payable60,000Accruals30,000Profit Margin on Sales5%Dividend Payout50%Note: All figures are as of the end of last yearRequired:If you need $0.80 in assets  for every $1.00 in sales, by how much can sales increase without obtaining  additional outside financing?  HINT: Use  the AFN formula.

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