$2019$ Income Statement

Sales $$929,000$

Costs $$723,000$

Other expenses $$19,000$

EBIT $$187,000$

Interest paid $$14,000$

Taxable income $$173,000$

Taxes $(35\%)$ $$60,550$

Net income $$112,450$

Dividends $$33,735$

Addition to retained earnings $$78,715$

Balance Sheet as of December $31,2019$

Cash $$25,300$

Accounts receivable $$40,700$

Inventory $$86,900$

Total current assets $$152,900$

Property, plant, and equipment $$413,000$

Total Assets $$565,900$

Accounts payable $$68,000$

Notes payable $$17,000$

Total current liabilities $$85,000$

Long$-$term debt $$158,000$

Owner's equity

Common stock and paid$-$in surplus $$140,000$

Accumulated retained earnings $$182,900$

Total equity $$322,900$

Total Liabilities and Equity $$565,900$

The most recent financial statements for Retro Machine, Inc., follow. Sales for $2020$ are projected to grow by $20\%.$ Interest expenses will remain constant; the tax rate and the dividend payout rate will also remain constant. Cost, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.

$($a$)$ If the firm operates at full capacity and no new debt and equity are issued, what is the external financing need $($additional funds needed$)$ to support the $20\%$ growth rate in sales?

$($b$)$ Suppose now that the firm was operating at only $80\%$ capacity in $2019.$ What is EFN now?

$($c$)$ Suppose in $($a$)$ that the firm wants to keep its total debt to equity constant. What is the EFN now?

$($d$)$ Calculate the sustainable growth rate assuming working at full capacity.