Harvard Prep Shops, a national clothing chain, had sales of $$300$ million last year. The business has a steady net profit margin of $25$

percent and a dividend payout ratio of $40$ percent. The balance sheet for the end of last year is shown below:

Harvard's anticipates a large Increase in the demand for tweed sport coats and deck shoes. A sales increase of $25$ 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?

Yes

No

b$.$ What would the need for external financing be if the net profit margin went up to $30$ percent and the dividend payout ratio was

Increased to $75$ percent? $($Enter the answer in millions. Round the final answer to $2$ decimal places.$)$