Next year’s sales for Beta Corporation are expected to be \($5\) million. Current sales are \($3.5\) million, based on current assets of \($2.4\) million and fixed assets of \($2.5\) million. The firm’s net profit margin is 5 percent after taxes.

Beta estimates that current assets will rise in direct proportion to the increase in sales but that its fixed assets will increase by only \($0.5\) million. Currently, Beta has \($620,000\) in accounts payable (which vary directly with sales), \($0.5\) million in long-term debt (due in 3 years), and common equity (including \($0.25\) million in retained earnings) totaling \($1\) million. Beta plans to pay \($0.25\) million in common stock dividends next year.

a. What are Beta's total financing needs (that is, total assets) for the coming year?

b. Given Beta's projections and dividend payment plans, what are its discretionary financing needs?

c. Based on your projections, and assuming that the \($0.5\) million expansion in fixed assets will occur, what is the largest increase in sales the firm can support without having to resort to the use of discretionary sources of financing?