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2. Austin Boston Corporation's balance sheet for last year is presented below: Cash + $ 400,000 Accounts payable* $1,500,000 Accounts receivable 2,000,000 Notes payable 1,000,000 Inventory * 3,000,000 Mortgage 2,500,000 Fixed assets 3,600,000 Common stock 2,500,000 Retained earnings 1,500,000 Total assets $9,000,000 Total liabilities and equity $9,000,000 Sales last year were $10,000,000 and they are expected to increase by 20 percent next year. Net profit margin is forecasted to be 8 percent. Austin Boston plans to pay dividends of 60%. Management expects that the sales increase can be handled by existing fixed assets. How much external funds does Austin Boston need next year? $396,000 NPm= .08 d= 6 A= 9,000,000 L = 2,000,000 External Funding Requirement EFR = g(assets* this year) - g(liabilities* this year) - sales this yea (1 + g)NPM(1-d)