Question 5: (from chapter 9) The Balanco Corporation anticipates a 20 percent increase in sales for 2021 over its 2020 level. Balanco is currently operating at full capacity and thus expects to increase its investment in both current and fixed assets in order to support the increase in forecasted sales. BALANCO CORPORATION INCOME STATEMENT FOR DECEMBER 31, 2020 (THOUSANDS OF DOLLARS) Sales $15.000 Operating expenses $13.000 EBIT $2.000 Interest $400 EBT $1.600 Taxes (40%) $640 Net income $960 Cash dividends (40%) $384 Aaaea retainea $576 Cash Accounts receivable Inventories Total current assets BALANCE SHEET AS OF DECEMBER 31, 2020 (THOUSANDS OF DOLLARS) $1.000 Accounts payable $2.000 Bank Loan $2.200 Accrued liabilities $5.200 Total current liabilities Long-term debt Common stock $6.800 Retained earnings $12.000 Total liabilities & equity $1.600 $1.800 $1.200 $4.600 $2.200 $2.400 $2.800 $12.000 Fixed assets, net Total assets A. Estimate Balanco's sustainable sales growth rate based on the financial data relationships for 2020. In making your estimate, calculate each component of the firm's operating performance and financial policies. B. Estimate the additional funds needed (AFN) for 2021 using the formula or equation method