Morrissey Technologies Inc.: Balance Sheet as of December 31, 2001 Cash $ 180,000 Receivables 360,000 Inventories 720,000 Total current assets $1,260,000 Fixed assets 1,440,000 Total assets $2,700,000 Mom'ssey Technologies Inc.: Income Statement for December 31, 2001 Sales Operating costs EBIT Interest EBT Taxes (40%) Net income PER SHARE DATA: Common stock price Earnings per share (EPS) Dividends per share (DPS) Accounts payable Notes payable Accruals Total current liabilities Common stock Retained earnings Total liabilities and equity $3,600,000 3,279,720 $ 320,280 20,280 $ 300,000 120,000 $ 180,000 $24.00 $ 1.80 $ 1.08 $ 360,000 156,000 180,000 $ 696,000 1,800,000 204,000 W a. Suppose that in 2002 sales increase by 10 percent over 2001 sales and that 2002 DPS will increase to $1.12. Construct the pro forma nancial statements using the pro jected nancial statement method. Use AFN to balance the pro forma balance sheet. How much additional capital will be required? Assume the rm operated at full ca pacity in 2001. b. If the prot margin were to remain at 5 percent and the dividend payout rate were to remain at 60 percent, at what growth rate in sales would the additional nancing requirements be exactly zero? (Hint: Set AFN equal to zero and solve for g.) Lewis Company: Balance Sheet as of December 31, 2001 (Thousands of Dollars) Cash $ 80 Accounts payable $ 160 Accounts receivable 240 Accruals 40 Inventories 720 Notes payable 252 Total current assets $1,040 Total current liabilities $ 452 Fixed assets 3,200 Long-term debt 1,244 Total debt $1,696 Common stock 1,605 Retained earnings 939 Total assets $4,240 Total liabilities and equity $4,240 Lewis Company: Income Statement for December 31, 2001 (Thousands of Dollars) Sales $8,000 Operating costs 7,450 EBIT $ 550 Interest 150 EBT $ 400 Taxes (40%) 160 Net income $ 240 PER SHARE DATA: Common stock price $16.96 Earnings per share (EPS) $ 1.60 Dividends per share (DPS) $ 1.04 a. The firm operated at full capacity in 2001. It expects sales to increase by 20 percent during 2002 and expects 2002 dividends per share to increase to $1.10. Use the projected financial statement method to determine how much outside financing is re- quired, developing the firm's pro forma balance sheet and income statement, and use AFN as the balancing item. b. If the firm must maintain a current ratio of 2.3 and a debt ratio of 40 percent, how much financing will be obtained using notes payable, long-term debt, and common stock