Marvin industries Inc. operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, teams, and organizations to create, publish, promote, and monetize their digital content. The company is forecasting operations to determine the additional financing that will be needed to support its operations and to assess whether the firms anticipated performance is in line with the companys own general targets and investors expectation.

Marvin Industries: balance sheet as of December 31, 2020 (Thousands of dollars)

Marvin Industries: Income Statement for December 31, 2020 (Thousands of dollars)

Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Marvin has arranged to sell $5,000 of new common stock in 2021 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2021. The companys net profit margin on sales is 9.75%, and 60% of earnings will be paid out as dividends. Marvin is operating at full capacity, so its assets must grow at the same rate as projected sales.

Calculate the required level of fixed assets for Marvin Industries if the company operates at no excess capacity with full capacity sales of $36,000 in 2020.

f Define the term self-supporting growth rate. Determine the self-supporting growth rate for Marvin Industries.

\begin{tabular}{|c|c|c|c|} \hline Cash & 2,000 & Accounts Payable & 7,200 \\ \hline Receivables & 10,800 & Notes Payable & 3,400 \\ \hline Inventories & 12,400 & Accruals & 2,620 \\ \hline \multirow[t]{2}{*}{ Total current assets } & 25,200 & Total current liabilities & 13,220 \\ \hline & & Long-term debt & ? \\ \hline \multirow[t]{2}{*}{ Fixed assets } & 21,600 & Common stock & 2,000 \\ \hline & & Retained earnings & 26,580 \\ \hline Total assets & 46,800 & Total liabilities \& equity & 46,800 \\ \hline \end{tabular} \begin{tabular}{|lc|} \hline Sales & 36,000 \\ Operating costs & 30,000 \\ EBIT & 5,400 \\ Interest & 720 \\ Taxes @ 25\% & 1,170 \\ Net income & 3,510 \\ Dividends 60% & 2,016 \\ Addition to retained earnings & 1,404 \\ \hline \end{tabular}