Suppose, you were hired by GEMC, Inc., to assist the company with its financial planning and to evaluate the companys performance. Your supervisor provides you with the most recent income statement and balance sheet of GEMC, Inc. (provided bellow).

GEM, Inc.
2019 Income Statement
Sales	52,000,000
COGS	39,000,000
Other expenses	5,200,100
Depreciation	1,904,220
EBIT	5,895,680
Interest	630,520
Taxable income	5,265,160
Taxes (35%)	1,842,806
Net income	3,422,354
Dividends	760,000
Add to RE	2,662,354

GEM, Inc.
Balance Sheet as of December 2019
Assets			Liabilities & Equity
Current Assets			Current Liabilities
Cash	456,435		Accounts Payable	1,029,005
Accounts rec.	733,125		Notes Payable	2,121,350
Inventory	1,273,180		Total CL	3,150,355
Total CA	2,462,740
			Long-term debt	5,500,000
			Shareholder Equity
Fixed assets			Common stock	600,000
Net PP&E	17,823,430		Retained earnings	11,035,815
			Total Equity	11,635,815
Total Assets	20,286,170		Total L&E	20,286,170

Other Inputs
Tax rate	35%
Growth rate	20%
Fixed asset utilization	100%

Questions:

1. Calculate the internal growth rate and sustainable growth rate for GEMC
2. Sales for 2020 are projected to grow by 20 percent. Interest expense and depreciation expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued, what is the external financing needed (EFN) to support the 20 percent sales growth? Please Explain thoroughly. Thank you.