Use the following information to answer questions

Radical Edge Company has forecast a 20% sales growth for the next year. Current financials are shown below:

Income Statement

Sales 40,000,000

Costs 34,000,000

Taxable Income 6,000,000

Taxes 1,800,000

Net Income 4,200,000

Dividends 1,800,000

Addition to retained earnings 2,400,000

Balance Sheet

Assets

Current assets 8,000,000

Liabilities and Equity

Short-term debt 8,000,000

Long-term debt 6,000,000

Fixed assets 22,000,000

Common stock 4,000,000

Accumulated retained earnings 12,000,000

Total equity 16,000,000

Total assets 30,000,000

Total liabilities and equity 30,000,000

Calculate sustainable growth.

Construct pro-forma statements using the % of Sales Method (costs, all assets, and current liabilities rise with sales) assuming the dividend payout rate and the tax rate will stay the same. Calculate external financing, and answer the following questions accurate to $1.

1. Using the information above for Radical Edge, the Sustainable Growth Rate is % (min 2 decimals).