M M N o P U G 1 2 Information tiven 1 MUM Incorporated Balance Sheets of 12/31/XO 4 Assets Usabilities and equity Cash 57.500.00 AVP $ 38,000.00 6. NVR 5 10,000.00 Accruals $ 45,000.00 7 Inventory 5 55,000.00 Notes payable 3 Current assets 102,500.00 Current Balilities $ 83,000.00 9 Plant & equipment 5 120.000,00 Common stock $ 70,000.00 10 Total assets $ 202,500.00 Retained earnings 5 49,500.00 11 Total liabilities and equity 5 207.500.00 12 13 with sales of $350,000, MIM Inc. is operating at capacity but management is anticipates that sales will grow 25% during this coming year 14 The company nams 10% on sales and distries Sox of earnings to stockholders 15 16 17. In addition to cash, which sets and abilities will increase with the increase in sales and by how much of the percent of sales IN is used to forecast the increases? 19 20 21 22 21 24 b. How much extemal Finance will the form med? 25 26 27 28 30 c. If cash did not increase but could be maintained at $7,500, what impact would the lower cash have on the firm's need for external finance? 31 12 33 34 as 36 d. If the firm distributed 25% Instead of 50% of its earnings, would it need external finance? 17 38 30 e. Construct a new balance sheet assuming that cash increases with the increase in sales and the firm distributes Sex of its earnings 2 to stocholders. If the firm needs external finance, acquire the funds by Issuing a short-term note to a commercial bank. Compare this financing strategy to the strategies Implied by the answers to parts and d. 45 25 Pohl cu re