The 2015 financial statements for Growth Industries are presented below. Sales and costs in 2016 are projected to be 20% higher than in 2015. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at full capacity, so it plans to increase fixed assets in proportion to sales. What external financing will be required by the firm? Interest expense in 2016 will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of .40.

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INCOME STATEMENT, 2015 Sales Costs EBIT Interest expense Taxable income Taxes (at 35%) Net income $200,000 150,000 $50,000 10,000 S 40,000 14,000 $ 26,000 Dividends Addition to retained earnings $10,400 $15,600 BALANCE SHEET, YEAR-END, 2015 Assets Liabilities Current assets Current liabilities Cash Accounts receivable Inventories S 3,000 Accounts payable 8,000 29,000 Total current liabilities Long-term debt S 10,000 S 10,000 100,000 Total current assets 40,000 Stockholders' equity Net plant and equipmen 160,000 Common stock plus additional paid-in capital 15,000 75,000 Retained earnings Total liabilities plus stockholders' equity Total assets $200,000 $200,000