1. Firm Q expects a 20 percent sales growth rate for next year. The tax rate is 25%. The current end-of-the-year financial statements for the firm are shown below: Firm Q 20XX Income Statement Sales $150,000,000 Costs (120,000,000) Depreciation (4,000,000) Earnings before interest and taxes (EBIT) $26,000,000 Interest (2,000,000) Taxable income $24,000,000 Taxes at 25% (6,000,000) Net income $18,000,000 Dividends Additions to retained earnings $7,200,000 $10,800,000 Firm Q Balance Sheet as of December 31, 20XX Assets Current assets Cash $6,000,000 Accounts receivable 20,000,000 Inventory 24,000,000 Total current assets $50,000,000 Fixed assets Net plant and equipment $100,000,000 Total assets $150,000,000 Liabilities and Equity Current liabilities Accounts payable $15,000,000 Notes payable 20,000,000 Total current liabilities $35,000,000 Long-term debt $35,000,000 Total liabilities $70,000,000 Shareholders' equity Common stock $30,000,000 Accumulated retained earnings 50,000,000 Total equity $80,000,000 Total liabilities and equity $150,000,000 a) Prepare pro forma income statement and balance sheet for next year. Assume that sales, costs, current assets (cash, accounts receivable, and inventory), fixed assets, and current liabilities (accounts payable and notes payable) grow at the sales growth rate of 20 percent. Also assume that depreciation, interest, long-term debt, common stock, dividend payout ratio, and retention ratio remain the same for next year. Compute external fund needed (EFN). b) Calculate the sustainable growth rate of the firm using the current (not pro forma) financial statements