Morrissey Technologies Inc.'s 2021 financial statements are shown here.

Morrissey Technologies Inc.: Balance Sheet as of December 31, 2021
Cash	$	160,000		Accounts payable	$	320,000
Receivables		320,000		Accrued liabilities		160,000
Inventories		640,000		Notes payable		44,000
Total current assets	$	1,120,000		Total current liabilities	$	524,000
				Long-term debt		70,000
Fixed assets		1,280,000		Common stock		1,600,000
				Retained earnings		206,000
Total assets	$	2,400,000		Total liabilities and equity	$	2,400,000

Morrissey Technologies Inc.: Income Statement for December 31, 2021
Sales	$	3,200,000
Operating costs including depreciation		2,865,180
EBIT	$	334,820
Interest		14,820
EBT	$	320,000
Taxes (25%)		80,000
Net income	$	240,000

Per share data:
Common stock price	$	39.00
Earnings per share (EPS)	$	2.40
Dividends per share (DPS)	$	0.96

Suppose that in 2022, sales increase by 14% 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 86.5% 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 12.5%. Assume that any common stock issuances or repurchases can be made at the firm's current stock price of $39.

Do not round intermediate calculations.

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

If the profit margin remains at 7.50% and the dividend payout ratio remains at 40%, 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.

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