A firm recently completed its fiscal year the financial statements follow: Current assets Net fixed assets Balance Sheet $1,000,000 Current liabilities 2,000,000 Long-term debt Owners' equity $3,000,000 $ 500,000 1,500,000 1,000,000 $3,000,000 Total Income Statement Sales Cost of goods sold Gross profit Operating expenses Interest Taxes Net profit Dividends $5,500,000 3,500,000 $2,000,000 1,000,000 170,000 350,200 $ 479,800 $ 400,000 In planning for the upcoming year, the sales division estimates a 25% increase in sales.The firm does not have the capacity to expand operations, so fixed assets must increase and remain proportional to sales. NEF= Total Assets/ Sales Current Liabilities/Sales Sales Net Profit Margin Change in Sales Change in Sales [1 - (Dividends / Net Profit)] The purpose of this analysis was to Determine the amount of additional assets required to support the higher sales level Determine how much spontaneous financing will be provided by new current liabilities and the amount of external financing required to support the higher level of sales Calculate the impact on firm value from the proposed sales increase All but one of these answers are correct