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		56,000
Total current assets	$	1,120,000		Total current liabilities	$	536,000
				Long-term debt		100,000
Fixed assets		1,280,000		Common stock		1,600,000
				Retained earnings		164,000
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		2,858,160
EBIT	$	341,840
Interest		21,840
EBT	$	320,000
Taxes (25%)		80,000
Net income	$	240,000

Per share data:
Common stock price	$	40.00
Earnings per share (EPS)	$	2.40
Dividends per share (DPS)	$	1.44

Suppose that in 2022, sales increase by 15% 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 85.5% 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 13.5%. Assume that any common stock issuances or repurchases can be made at the firm's current stock price of $40.

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.

Download spreadsheet Forecasting Financial Statements-904291.xlsx

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	$ fill in the blank 2
Operating costs including depreciation	fill in the blank 3
Earnings before interest and taxes (EBIT)	$ fill in the blank 4
Interest	fill in the blank 5
Earnings before taxes (EBT)	$ fill in the blank 6
Taxes (25%)	fill in the blank 7
Net income (NI)	$ fill in the blank 8
Dividends	$ fill in the blank 9
Addition to retained earnings	$ fill in the blank 10
Morrissey Technologies Inc.: Pro Forma Balance Sheet as of December 31, 2022
Assets
Cash	$ fill in the blank 11
Receivables	fill in the blank 12
Inventories	fill in the blank 13
Total current assets	$ fill in the blank 14
Fixed assets	fill in the blank 15
Total assets	$ fill in the blank 16
Liabilities and Equity
Accounts payable	$ fill in the blank 17
Accrued liabilities	fill in the blank 18
Notes payable	fill in the blank 19
Total current liabilities	$ fill in the blank 20
Long-term debt	fill in the blank 21
Total liabilities	$ fill in the blank 22
Common stock	fill in the blank 23
Retained earnings	fill in the blank 24
Total common equity	$ fill in the blank 25
Total liabilities and equity	$ fill in the blank 26

If the profit margin remains at 7.50% and the dividend payout ratio remains at 60%, 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.

____ % ?