In 2002, sales were $60mn. In 2003, management believes sales will increase by 20% to a total of $72mn. The profit margin is expected to be 5% and the dividend payout ratio is targeted at 40%. No excess capacity exists.

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In 2002, sales were $60mn. In 2003, management believes sales will increase by 20% to a total of $72mn. The profit margin is expected to be 5% and the dividend payout ratio is targeted at 40%. No excess capacity exists. What is the additional financing requirement (in $ mn) for 2003 using AFN formula? How much can sales grow without additional funds?

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