q11

Conn Man's Shops, a national clothing chain. had sales of $420 million last year. The business has a steady net profit margin ofS percent and a diyidend payout ratio of25 percent. The balance sheet forthe end of last year Is shown. Balance Sheet End of Year (in :3 millions) Assets Liabilities and Stockholders' Equity Cash 5 42 Accounts payable 5 54 Accounts receivable 4? Accrued expenses 49 Inventory 93 Other payables 53 Plant and equipment 5': 17"5 Common stock 34 Retained earnings 126 Total assets 5': 35?" Total liabilities and stockholders' eguit}r $ 35? The firm's marketing staff has told the president that In the coming year there will be a large Increase In the demand for overcoats and wool slacks. A sales Increase of 10 percent Is forecast for the company. All balance sheet Items are expected to maintain the same percent-ofsales relationships as last year,\" except for common stock and retained earnings. No change Is scheduled In the number of common stock shares outstanding. and retained earnings WIII change as dictated by the profits and dividend policy of the firm. (Remember. the net profit margin Is 8 percent.) *This includes xed assets. since the firm Is at full capacity. a. Will external financing be required forthe company during the coming year? D\" No C3- 'r'es b. Whatwould be the need for external financing if the net profit margin went up to 8.50 percentand the diyidend payout ratio was increased to 65 percent? Note: Negative amount should be Indicated by a minus sign. Do not round Intermediate calculations. Enter your answer In dollars, not millions, [e.g., $1,234,5IETI. Input your answer as positive a value