Problem 4-34: Required New Funds: 8 points (2 at 4 points each) Harvard Prep Shops, a national clothing chain, had sales of $300 million last year. The business has a steady net profit margin of 30 percent and a dividend payout ratio of 30 percent. The balance sheet for the end of last year is shown below: Balance Sheet December 31, 20xx ($ millions) Assets Liabilities and Shareholders' Equity Cash $10 Accounts payable $15 Account receivable 40 Accrued expenses 10 Inventory 66 Other payables 14 Common stock 85 Plant and equipment 145 Retained earnings 137 Total assets $261 Total liabilities and equity $261 Harvard's anticipates a large increase in the demand for tweed sport coats and deck shoes. A sales increase of 30 percent is forecast. All balance sheet items are expected to maintain the same percent-of-sales relationships as last year, except for common stock and retained earnings. No change in the number of common shares outstanding is scheduled, and retained earnings will change as dictated by the profits and dividend policy of the firm., a. Will external financing be required for the Prep Shop during the coming year? Yes O No b. What would the need for external financing be if the net profit margin went up to 35 percent and the dividend payout ratio was Increased to 65 percent? (Enter the answer in millions, Round the final answer to 2 decimal places.) Required new funds $ million