1.) Based on the 2019 financial statements relationships, estimate the sustainable sales growth rate (in percentage) for the Munich Corporation for 2020 using beginning and ending total equities. Round by two decimal places.

2.) Munich has a target dividend payout of 50 percent of net income. Based on the 2019 financial statements relationships, estimate the sustainable sales growth rate (in percentage) for the Munich Corporation for 2020. No rounding needed.

3.) Show how the above sustainable growth rate would change if Munich decided not to pay any dividends in 2020.

4.) Assume the Munich Corporation wants to grow its sales by 30 percent in 2020 over its 2019 level. Estimate the additional funds needed that will be necessary to support this rapid increase in sales. No rounding needed. Use the target dividend payout 50%.

Munich Exports Corporation

	2018	2019
Cash	$ 50,000	$ 50,000
Accounts receivable	200,000	300,000
Inventories	450,000	570,000
Total current assets	700,000	920,000
Fixed assets, net	300,000	380,000
Total assets	$1,000,000	$1,300,000
Accounts payable	130,000	$ 180,000
Accruals	50,000	70,000
Bank loan	90,000	90,000
Total current liabilities	270,000	340,000
Long-term debt	400,000	550,000
Common stock ($.05 par)	50,000	50,000
Additional paid-in-capital	200,000	200,000
Retained earnings	80,000	160,000
Total liabilities and equity	$1,000,000	$1,300,000
	2018	2019
Net sales	$1,300,000	$1,600,000
Cost of goods sold	780,000	960,000
Gross profit	520,000	640,000
Marketing	130,000	160,000
General and administrative	150,000	150,000
Depreciation	40,000	55,000
EBIT	200,000	275,000
Interest	45,000	55,000
Earnings before taxes	155,000	220,000
Income taxes (40% rate)	62,000	88,000
Net income Cash dividends	$ 93,000 $55,800	$ 132,000 $79,200