a. Current assets are $200, sales are $1,000, current liabilities are $30, the profit margin is 8%, and the firm is not paying dividends. If sales increase 30%, what additional funds are needed? (Hint: Use the equation approach.)

b. If the return on assets is 15% and the dividend payout ratio is 50%, what is the maximum internal growth rate? Recompute the maximum internal growth rate for a return on assets of 10%, then 20%. Recompute the maximum internal growth rate for a dividend payout ratio of 0%, then 25%.