Morgan Manufacturing has the following abbreviated financial statements for the year ending today. Assets $60,000,000 Operating liabilities Short-term debt Long-term debt Equity Liabilities + equity $10,000,000 $5,000,000 $15,000,000 $30,000,000 $50,000,000 Revenue -Operating expenses EBIT -Interest -Taxes Net income $50,000,000 -$42,000,000 $8,000,000 -$500,000 -$2,250,000 $5,250,000 Suppose that Morgan forecasts a 10% increase in its revenue for the coming year. (a) Suppose that (i) assets, operating liabilities, and short-term debt will change in response to the change in revenue, (ii) the firm intends to have a payout rate of 25%, and (iii) the asset turnover ratio, the profit margin, and the $ amount of long-term debt are expected to be constant. What will be the external funds needed based on these assumptions? (Hint: use the equation and do not forecast entire new statements.) What does this number tell you? (6 points) (b) What would happen to the forecasted EFN for Morgan if the firm increased its desired payout ratio to 30%? Hold other factors constant. Provide a new calculation and a brief explanation of your estimates. (3 points)