MC Qu. 4-A10 Major Manuscripts, Inc. is currently operating at maximum ...

Major Manuscripts, Inc. 2012 Income Statement
Net sales	$	9,300
Cost of goods sold		7,615
Depreciation		360
Earnings before interest and taxes	$	1,325
Interest paid		40
Taxable Income	$	1,285
Taxes		485
Net income	$	800
Dividends	$	194

Major Manuscripts, Inc. 2012 Balance Sheet
	2012				2012
Cash	$	3,900		Accounts payable	$	3,520
Accounts rec.		1,030		Long-term debt		280
Inventory		4,200		Common stock	$	4,300
Total	$	9,130		Retained earnings		5,930
Net fixed assets		4,900
Total assets	$	14,030		Total liabilities & equity	$	14,030

Major Manuscripts, Inc., is currently operating at maximum capacity. All costs, assets, and current liabilities vary directly with sales. The tax rate and the dividend payout ratio will remain constant. How much additional debt is required if no new equity is raised and sales are projected to increase by 10 percent?

$667

$664

$86

$384

$104