arvard Prep Shops, a national clothing chain, had sales of $$300$ million last year. The business has a steady net profit margin of $20$ percent and a dividend payout ratio of $25$ percent. The balance sheet for the end of last year is shown below:

Balance Sheet

December $31,20$XX $($$ millions$)$

Assets Liabilities and Shareholders' Equity

Cash $$10$ Accounts payable $$35$

Account receivable $40$ Accrued expenses $10$

Inventory $63$ Other payables $12$

Common stock $90$

Plant and equipment $130$ Retained earnings $96$

Total assets $$243$ Total liabilities and equity $$243$

Harvard$$s anticipates a large increase in the demand for tweed sport coats and deck shoes. A sales increase of $30$ percent is forecast.

All balance sheet items are expected to maintain the same percent$-$of$-$sales relationships as last year, except for common stock and retained earnings. No change in the number of common shares outstanding is scheduled, and retained earnings will change as dictated by the profits and dividend policy of the firm.

a$.$ Will external financing be required for the Prep Shop during the coming year?

multiple choice

Yes

No

b$.$ What would the need for external financing be if the net profit margin went up to $25$ percent and the dividend payout ratio was increased to $60$ percent? $($Enter the answer in millions. Round the final answer to $2$ decimal places.$)$

Required new funds $

million