5. ABC tours just completed the financial statement for the year 2019. The company approached you as a financial planner for its planning of next year sales. The company had historically used little planning for investment needs. As a result, the company experienced some challenging times because of cash shortage. The lack of planning resulted in missed sales, as well as periods when staffs were unable to draw salaries. To this end, you are requested to prepare a financial plan for the year 2020 so the company can begin to address any outside investment requirements. The income statement and balance sheet for the year 2019 are given below: ABC Tours, Income statement as on 31 Dec 2019 Sales Costs other expenses Earnings before interest and taxes Interest Taxable income Tax @40% Net income Dividends Retained earnings ABC tours, Balance sheet as on 31 Dec 2019 29,132,740 22,224,680 3,867,500 3,040,560 478,240 2,562,320 1,024,968 1,537,352 560,000 977,352 Assets Cash Inventory Accounts Receivable Total current assets Amount Liabilities and Equity Rs 441000 Accounts payable 1,037,120 Accruals 708,400 Notes payable 2,186,520 Total current liabilities Long-term debt 16,122,400 Common stock Retained earnings Rs 18308920 Total liabilities and equity Amount Rs 572,000 317,000 2,030,000 29,19,000 5,320,000 350,000 9,719,920 Rs 18308920 Net plant and equipment Total assets a. Calculate internal growth rate and sustainable growth rate and what do these numerical value mean? Explain. b. ABC tour is planning for a growth rate of 20 per cent next year. You are required to calculate the external financing needed for the company assuming the company is operating at full capacity. c. Suppose the company is operating at 75 per cent capacity in 2019, what suggestion do you provide to the company for the investment in new fixed assets that are required to support the projected sales of Rs 40,000,000? [3+4+3=10]