4.

Income Statement
Sales	23,600
Costs	18,340
Taxable income	5,260
Taxes	1,840
Net income	3,420
Dividends	1,368

Balance Sheet
	2015			2015
Current assets	5,860		Current liabilities	2,470
Net fixed assets	19,600		Long-term debt	8,800
			Common Stock	10,000
			Retained Earnings	4,190

Assume that net working capital and all costs increase directly with sales. Also assume that the tax rate and the dividend payout ratio are constant. The firm is currently operating at full capacity. What is the external financing need if sales increase by 4 percent?

A. -$1,214.48

B. -$804.15

C. -$397.19

D. $201.16

E. $525.38