The firm is generating its proforma balance sheet for 2016. For the year 2015, sales were $4 million. Sales are expected to be $5 million in 2016. The company expects its net profit margin for 2016to equal 5%. In each of the past several years, the company has been paying $50,000 in dividends to its stockholders. The company wants to increase dividends to $80,000 in 2016. The 2015balance sheet for the companyis attached. Assume that Cash, Accounts Receivable, Inventories, and Accounts Payable vary directly with sales. Net Fixed Assets must increase by $175,000 to support the sales expansion. Any additional financing that the company will need for 2016will come from new long-term debt, but the company has a covenant that states that their ratio of total debt to total assets may not exceed 45%. How much additional financing will the company need? Can they pay the increased dividend, increase their long-term debt, and still satisfy the covenant? Show numbers to support your answer.

Cash $ 100.000 Accounts payable* Accounts receivable 4010, 000 Notes payable 4010.000 Inventories 1, 200.0.00 Long - term debt 200.000 Fixed assets, NIC! 500. 0100 Stock holders' equity Total assets $2. 2010.0.00 Total liabilities & equity $2.2010.000