BlueStem is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended. Based on the percentage of sales method estimate the funding requirement (if any) for BlueSteam in the coming year if it increases the payout ratio from 10% to 50%.

All dollars are in millions.

Last year's sales = S0 $300.00

Last year's accounts payable $50.00

Sales growth rate = g 40%

Last year's notes payable (to bank) $15.00

Last year's total assets = A0 $500.00

Last year's accruals $20.00

Last year's profit margin = M 20.00%

Initial payout ratio 10.00%

New payout ratio 50.00%

(Notes payables is an interest-bearing liability; as such not a spontaneous (operating) liability)

Group of answer choices

1. $130
2. -$92
3. $42
4. $55
5. $120