12.A firm has the following income statement and balance sheet for fiscal year ended June 30, 2019. You must create projected statements for 2020 using the percentage of sales method. Use the following assumptions: - Sales will increase by 10% in 2020. - Operating costs, Cash, Other CA, NFA, and A/P all change as a percentage of sales. LT Debt and C Stock will remain the same as the previous year. - The firm pays out half of their earnings as dividends. - Retained earnings determined: RE last year + (NI for projected year - Dividends Paid for projected year - The firm pays interest on debt at 10%. The tax rate is 36%. Determine the following: a. What is the amount of additional funds needed (if any) using the AFN equation? b. Create pro forma statements for 2020. C. How much will be paid in dividends for the projected year? d. How much in AFN is needed, if any, or will a special dividend be paid to shareholders (use the percent of sales approach-i.e., forecast the financial statements)? e. What is the new balance in the retained earnings account? f. At what rate can the firm grow without obtaining external capital? 12.A firm has the following income statement and balance sheet for fiscal year ended June 30, 2019. You must create projected statements for 2020 using the percentage of sales method. Use the following assumptions: - Sales will increase by 10% in 2020. - Operating costs, Cash, Other CA, NFA, and A/P all change as a percentage of sales. LT Debt and C Stock will remain the same as the previous year. - The firm pays out half of their earnings as dividends. - Retained earnings determined: RE last year + (NI for projected year - Dividends Paid for projected year - The firm pays interest on debt at 10%. The tax rate is 36%. Determine the following: a. What is the amount of additional funds needed (if any) using the AFN equation? b. Create pro forma statements for 2020. C. How much will be paid in dividends for the projected year? d. How much in AFN is needed, if any, or will a special dividend be paid to shareholders (use the percent of sales approach-i.e., forecast the financial statements)? e. What is the new balance in the retained earnings account? f. At what rate can the firm grow without obtaining external capital