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Consider the financial statements below (in $000): Revenue $200,000 Cost of Goods Sold 120,000 Gross Profit 80,000 Operating Expenses 30,000 Operating Income 50,000 Interest Expense

Consider the financial statements below (in $000):

Revenue $200,000
Cost of Goods Sold 120,000
Gross Profit 80,000
Operating Expenses 30,000
Operating Income 50,000
Interest Expense 10,000
Earnings before tax 40,000
Income tax expense (30%) 12,000
Net Income 28,000
Cash (min desired balance) 20,000
Accounts Receivable 40,000
Inventory 30,000
Property, Plant, & Equipment, net 150,000
Total Assets $240,000
Accounts payable 20,000
Long-term debt 120,000
Common Stock 40,000
Retained earnings 60,000
Total Liabilities and equity $240,000

Assumptions:

  • Sales increase: 48%
  • Net Capex: $22,000
  • Operating margin: 30%
  • Interest expense: no change
  • Retention ratio: 40%

Given the above assumptions, what is the External Financing Need (EFN)?

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