Formulas: Dividend payout ratio = Cash dividends / Net income, Retention (plowback) ratio=1-Dividend payout ratio = Addition to retained earnings / Net income, Internal Growth Rate= (ROA * Retention Ratio)/(1-ROA * Retention Ratio), ROA Return on Assets= Net Income / Total Assets, Sustainable Growth Rate=(ROE * Retention Ratio)/(1- ROE * Retention Ratio), ROE Return on Equity= Net Income / Total Equity, Profit margin = Net Income Sales, External Financing Needed = Projected Assets - Projected Liabilities & Projected Owner's Equity. Questions: A corporation has the following financial information for 2020: Sales = $2 Million, Net Income = $0.4 Million, Dividends = $0.1 Million; Current Assets = 50.4 Million, Fixed Assets = $3.6 Million Current Liabilities $0.2 Million, Long Term Debt= $1 Million, Common Stock = $2 Million, Accumulated Retained Earnings = $0.8 Million 1) What is the sustainable growth rate and internal growth rate for 2020? Hint: Calculate Retention Ratio, ROA, ROE and then use the formulas of sustainable growth rate and internal growth rate. 2) Assuming this corporation was operating at full capacity in 2020, (i.e., if the managers want to boost sales in 2021, they need to invest in fixed assets), and assuming that profit margin and payout ratio remain constant. If 2021 sales are projected to be $2.4 Million, what is the amount of external financing needed? Hint: Calculate Projected Assets, Liabilities and owners' equity for 2021. Then use: Projected External Financing Needed Projected Assets - Projected Liabilities & Projected Owner's Equity. Hint: Calculate Projected Assets, Liabilities and owners' equity for 2021. Then use: Projected External Financing Needed = Projected Assets - Projected Liabilities & Projected Owner's Equity