Problem 4 Marcel Industries is currently operating at 85% capacity. They are projecting 15% revenue growth next year and accordingly, cost of goods sold, selling & administrative expenses, current assets and accounts payable will increase at the same rate as sales growth. Fixed assets and depreciation expense will also increase with sales, if Marcel Industries must purchase new fixed assets to accommodate the increase in sales volume. MARCEL INDUSTRIES Statement of Comprehensive Income For the Year Ended December 31, 2019 MARCEL INDUSTRIES Statement of Financial Position December 31, 2019 Revenue $1,841,300 ASSETS Cost of goods sold 1,397,400 Cash $24,700 Gross Profit 443,900 Short term investments 7,000 Selling and administrative expenses 256,850 Accounts receivable 361,800 Depreciation 14,400 Inventory 330,000 EBIT 172,650 Prepaid expenses 800 Interest expense 50,550 Net property, plant, and equipment 172,900 EBT 122,100 Intangible assets 28,200 Income tax expense 27,100 Total Assets $925,400 Net income 95,000 LIABILITIES & SHAREHOLDERS'S EQUITY Accounts payable $196,700 Bank loan payable (due within 1 year) 202,000 Other current payables 23,700 Long-term debt 181,600 Common shares 14,000 Retained earnings 307,400 Total liabilities & shareholders' equity $925,400 Required 1. Are new fixed assets required to achieve the projected sales growth? Explain. 2. Calculate the external financing required to achieve the projected sales growth.