Morrissey Technologies Inc.'s 2021 financial statements are shown here. Morrissey Technologies Inc.: Balance Sheet as of December 31, 2021 Cash $ 255,000 Accounts payable $ 510,000 Receivables 510,000 Accrued liabilities 255,000 Inventories 1,020,000 Notes payable 77,500 Total current assets $1,785,000 Total current liabilities $ 842,500 Long-term debt 117,500 Fixed assets 2,040,000 Common stock 2,550,000 Retained earnings 315,000 Total assets $3,825,000 Total liabilities and equity $3,825,000 Morrissey Technologies Inc.: Income Statement for December 31, 2021 Sales $5,100,000 Operating costs including depreciation 4,736,600 EBIT $ 363,400 Interest 23,400 EBT $ 340,000 Taxes (25%) 85,000 Net income $ 255,000 $61.00 Per share data: Common stock price Earnings per share (EPS) Dividends per share (DPS) $ 2.55 $ 1.02 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 89.5% and increase its total liabilities-to-assets ratio to 35%. (It believes its liabilities-to-assets ratio currently is too low relative to the industry average.) The firm will raise 20% 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 $61. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. 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 $ 5712000 5112240 Operating costs including depreciation Earnings before interest and taxes (EBIT) $ 599760 Interest 439.875 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 $ 285600 M 571200 Receivables Inventories 1142400 Total current assets $ 1999200 Fixed assets 2284800 4284000 Total assets $ Liabilities and Equity Accounts payable Accrued liabilities $ 571200 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 5.00% 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. %