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Question: 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 45%, 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$300.0Last year's accounts payable$50.0Sales growth rate = g40%Last year's notes payable$15.0Last year's total assets = A0*$500Last year's accruals$20.0Last year's profit margin = PM20.0%Initial payout ratio10.0%

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