2. Major Manuscripts, Inc. is currently operating current liabilities vary directly with sales. The tax constant. How much additional debt is required if no new equity is rals to increase by 8 percent? pts, Inc. is currently operating at maximum capacity. All costs, assets, and nes vary directly with sales. The tax rate and the dividend payout ratio will remain debt is required if no new equity is raised and sales are projected Major Manuscripts, Inc. 2009 Income Statement Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income $16,800 11,200 1.650 3,950 350 $3,600 1,224 $2,376 Taxes Net income Dividends $950 Major Manuscripts, Inc. 2009 Balance Sheet 2009 $1,040 2009 $3,300 2,780 10,000 4,510 Cash Accounts rec. Inventory Total Net fixed assets Total assets Accounts payable Long-term debt Common stock Retained earnings 650 7.500 $9,190 11,400 $20,590 Total liabilities & equity $20,590