1. If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales?

2. What is the highest rate at which the firms sales can grow without the need to issue any additional debt or equity?

3. If the firm is operating at full capacity and issues debt while keeping the debt/equity ratio of the firm unchanged, what external financing is needed to support the 20 percent growth rate in sales?

Q1. Calculating EFN The most recent financial statements for Moose Tours, Inc., appear below.Sales for 2016 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. MOOSE TOURS, INC. 2015 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes Net income Dividends $27,331 Addition to retained earnings 63,773 $752,500 585,600 15,400 $151,500 11,340 $140,160 49,056 $91,104 MOOSE TOURS, INC. Balance Sheet as of December 31, 2015 Assets Liabilities and Owners' Equity Current Assets Current Liabilities Cash $21,632 Accounts payable $58,140 Accounts receivable 34,799 Notes payable 14,535 Inventory 74,300 Total $72,675 Total $130,731 Long-term debt $135,000 Owner's equity Fixed assets Common stock and paid- $115,000 in surplus Net plant and equipment $353,120 Retained earnings 161,176 Total $276,176 Total assets $483,851 Total liabilities and owner's $483,851 equity 1. If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales? 2. What is the highest rate at which the firm's sales can grow without the need to issue any additional debt or equity? 3. If the firm is operating at full capacity and issues debt while keeping the debt/equity ratio of the firm unchanged, what external financing is needed to support the 20 percent growth rate in sales