Sales and costs are projected to grow at 20% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.50.

What is the required external financing over the next year? (Negative amounts should be indicated by a minus sign)

External financing =?

The 2017 financial statements for Growth Industries are presented below INCOME STATEMENT, 2017 Sales Costs EBIT Interest expense Taxable income Taxes (at 35%) Net income 218,000 155,006 $ 55,000 11,800 $44,800 15,400 $ 28,600 Dividends Addition to retained earnings 5 14,308 14, 300 BALANCE SHEET, YEAR-END, 2017 Assets Liabilities Current assets Current liabilities Cash Accounts receivable Inventories $4,0e0 9,000 Accounts payable Total current 1liabilities $ 11,80e S 11,e00 110,000 27-90 Long-term debt $ 40,08 Stockholders' equity Total current assets Common stock plus additional paid-in capital Retained earnings 150,000 15,000 54,000 s 19e,e00 Net plant and equipment Total assets s 190,8 Total liabilities and stockholders' equity