CASE 1 (35 points) The 2020 financial statements for Arrow Corporation follow. Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by 15 percent. The firm is operating at full capacity and no new debt or equity is issued. Income Statement Balance Sheet $7,900 Current assets $ 3,900 Current liabilities $ 2.100 Costs 5,500 Fixed assets 8,600 Long-term debt 3,700 Taxable income $2,400 Equity 6.700 Taxes (25%) 600 Total S12.500 Total $12.500 Net income $1,800 Sales Instructions: 1. Prepare Proforma Income Statement for 2021, and calculate dividends and addition to retained earnings in 2021. (10 points) 2. Prepare Proforma Balance Sheet for 2021. (10 points) 3. Calculate the amount of external financing needed in 2021, and explain what financing options are available for the company. (5 points) 4. Assuming that the company operated at 90% capacity in 2020, re-calculate Proforma Total Assets in 2021. (5 points) 5. How would you approach predicting next year's sales growth? Explain. (5 points)