Morrissey Technologies Inc.'s 2021 financial statements are shown here. Morrissey Technologies Inc.: Balance Sheet as of December 31, 2021 Cash $ 156,000 Accounts payable $ 312,000 Receivables 312,000 Accrued liabilities 156,000 Inventories 624,000 Notes payable 48,800 Total current assets $1,092,000 Total current liabilities $ 516,800 Long-term debt 68,000 Fixed assets 1,248,000 Common stock 1,560,000 Retained earnings 195,200 Total assets $2,340,000 Total liabilities and equity $2,340,000 Morrissey Technologies Inc.: Income Statement for December 31, 2021 Sales $3,120,000 Operating costs including depreciation 2,845,984 EBIT $ 274,016 Interest $ 260,000 Taxes (25%) 65,000 Net income $ 195,000 14,016 Per share data: Common stock price Earnings per share (EPS) Dividends per share (DPS) $38.00 $ 1.95 $ 1.56 Suppose that in 2022, sales increase by 12% over 2021 sales. The firm currently has 100,000 shares outstanding. It expects to maintain its 2021 dividend payout ratio and believes that its assets should grow at the same rate as sales. The firm has no excess capacity. However, the firm would like to reduce its operating costs/sales ratio to 87.5% and increase its total liabilities-to-assets ratio to 30%. (It believes its liabilities-to-assets ratio currently is too low relative to the industry average.) The firm will raise 30% of the 2022 forecasted interest-bearing debt as notes payable, and it will issue long-term bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 11.5%. Assume that any common stock issuances or repurchases can be made at the firm's current stock price of $38. Forecasting Financial Statements Common stock price Earnings per share2021 Dividends per share2021 $38.00 $1.95 $1.56 12% 100,000 87.5% Growth rate of sales Common stock outstanding2021 Operating costs/sales ratio2021 Total liabilities-to-assets ratio 2021 Proportion of short-term interest-bearing debt2021 Tax rate Before-tax cost of debt 30% 30% 25% 11.50% a. Construct the forecasted financial statements assuming that these changes are made. What are the firm's forecasted notes payable and long-term debt balances? What is the forecasted addition to retained earnings? Round your answers to the nearest cent. Morrissey Technologies Inc.: Pro Forma Income Statement for December 31, 2022 Sales $ Operating costs including depreciation Earnings before interest and taxes (EBIT) $ Interest $ Earnings before taxes (EBT) Taxes (25%) Net income (NI) $ Dividends $ Addition to retained earnings $ Morrissey Technologies Inc.: Pro Forma Balance Sheet as of December 31, 2022 Assets Cash $ Receivables Inventories Total current assets $ Fixed assets Total assets $ Liabilities and Equity Accounts payable $ Accrued liabilities Notes payable Total current liabilities $ Long-term debt Total liabilities $ Common stock Retained earnings Total common equity $ Total liabilities and equity $ b. If the profit margin remains at 6.25% and the dividend payout ratio remains at 80%, 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.) Round your answer to two decimal places. %