The most recent financial statements for Marvel Corporation follow. Sales for year 2022 are projected to increase by 12 percent. Tax rate will be 25% in year 2022. The company maintains a constant dividend payout ratio. The firm is operating at full capacity.

1 Calculate internal and sustainable growth rates. Explain what they mean.

2 Using the percentage of sales approach, prepare pro forma financial statements for year 2022.

3 Calculate the amount of external financing needed in 2022. What financing options are available for the company?

\begin{tabular}{|l|r|} \hline Income Statement & 2021 \\ \hline Sales & 50680390 \\ \hline Cost of goods sold & 37805950 \\ \hline Operating expenses & 6426562 \\ \hline Depreciation & 2271245 \\ \hline Operating income & 4176633 \\ \hline Interest & 793731 \\ \hline Taxable income & 3382902 \\ \hline Taxes & 845726 \\ \hline Net income & 2537176 \\ \hline Dividends & 771731 \\ \hline Addition to retained earnings & 1765445 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Income Statement & 2021 \\ \hline Sales & 50680390 \\ \hline Cost of goods sold & 37805950 \\ \hline Operating expenses & 6426562 \\ \hline Depreciation & 2271245 \\ \hline Operating income & 4176633 \\ \hline Interest & 793731 \\ \hline Taxable income & 3382902 \\ \hline Taxes & 845726 \\ \hline Net income & 2537176 \\ \hline Dividends & 771731 \\ \hline Addition to retained earnings & 1765445 \\ \hline \end{tabular}