a. Sustainable growth rate

b. Sustainable growth rate with no dividends

c. AFN with 40% growth rate

d. AFN over 2 years with 40% and 20% growth

[Sustainable Sales Growth Rates and Additional Funds Needed ] Following are two years of income statements and balance sheets for the Munich Exports Corporation. MUNICH EXPORTS CORPORATION BALANCE SHEETS 2018 2019 Cash $ 50,000 $ 50,000 Accounts receivable 200,000 300,000 Inventories 450,000 570,000 Total current assets 700,000 920,000 Fixed assets, net 300,000 380,000 Total assets $1,000,000 $1,300,000 Accounts payable $ 130,000 $ 180,000 Accruals 50,000 70,000 Bank loan 90,000 90.000 Total current liabilities 270,000 340,000 Long-term debt 400,000 550,000 Common stock (50.05 par) 50,000 50,000 Additional paid-in-capital 200,000 200,000 Retained earnings 80,000 160,000 Total liabilities and equity $1,000,000 $1,300,000 INCOME STATEMENTS 2018 2019 Net sales $1,300,000 $1,600,000 Cost of goods sold 780,000 960,000 Gross profit 520,000 640,000 Marketing 130,000 160,000 General and administrative 150,000 150,000 Depreciation 40,000 55.000 EBIT $ 200,000 $ 275.000 Interest 45,000 55.000 Earnings before taxes 155,000 220,000 Income taxes (40% rate) 62.000 88,000 Net income S 93,000 $ 132,000 Cash dividends $ 37,000 S52.000 Added Retained Earnings 56,000 70,000 [Sustainable Sales Growth Rates and Additional Funds Needed ] Following are two years of income statements and balance sheets for the Munich Exports Corporation. MUNICH EXPORTS CORPORATION BALANCE SHEETS 2018 2019 Cash $ 50,000 $ 50,000 Accounts receivable 200,000 300,000 Inventories 450,000 570,000 Total current assets 700,000 920,000 Fixed assets, net 300,000 380,000 Total assets $1,000,000 $1,300,000 Accounts payable $ 130,000 $ 180,000 Accruals 50,000 70,000 Bank loan 90,000 90.000 Total current liabilities 270,000 340,000 Long-term debt 400,000 550,000 Common stock (50.05 par) 50,000 50,000 Additional paid-in-capital 200,000 200,000 Retained earnings 80,000 160,000 Total liabilities and equity $1,000,000 $1,300,000 INCOME STATEMENTS 2018 2019 Net sales $1,300,000 $1,600,000 Cost of goods sold 780,000 960,000 Gross profit 520,000 640,000 Marketing 130,000 160,000 General and administrative 150,000 150,000 Depreciation 40,000 55.000 EBIT $ 200,000 $ 275.000 Interest 45,000 55.000 Earnings before taxes 155,000 220,000 Income taxes (40% rate) 62.000 88,000 Net income S 93,000 $ 132,000 Cash dividends $ 37,000 S52.000 Added Retained Earnings 56,000 70,000