Carter Corporation's sales are expected to increase from $5 million in 2001 to $6 million in 2002, or by 20 percent. Its assets totaled $3 million at...

Carter Corporation's sales are expected to increase from $5 million in 2001 to $6 million in 2002, or by 20 percent. Its assets totaled $3 million at the end of 2001. Carter is at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2001, current liabilities were $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accruals. The after-tax profit margin is forecasted to be 5 percent, and the forecasted payout ratio is 70 percent. Use this information to answer problems 4-1, 4-2, and 4-3. Q 4-1: Use the AFN formula to forecast Carter's additional funds needed for the coming year.