Homework Ch. 16 Morrissey Technologies Inc. Pro Forma Income Statement December 31, 2020 Operating costs (includes depreciation) EBIT Interest expense Taxes (25%) Net Income Dividends (60%) Addition to retained earnings 2019 $3,600,000 3,279,720 $320,280 20,200 $300,000 $ 75,000 $225,000 $ 2020 Morrissey Technologies Inc. Pro Forma Balance Statement December 31, 2020 2019 Assets Cash $180,000 Accounts receivable 360,000 730,000 Fixed assets 1,440,000 Total assets $2,700,000 Liabilities and Equity $540,000 ' Short-term bank loans 54,000 Total current te $596,000 Long-term bonds 100,000 Total liabilities 1696,000 $ Common stock 1,000,000 204,000 Total commen equity Total liabilities and equity $2,004,000 $2,700,000 2020 b. If the profit margin remains at 6.25% and the dividend payout ratio remains at 60, at what growth rate in sales will the additional financing requirements be exactly zero? In other words, what is the firm's sustainable growth rate? (Hint: Set AFN equal to zero and solve for g.) Do not round intermediate calculations. Round your answer to two decimal places