The Optical Scan Company has forecast a 20 percent sales growth rate for next year. The current financial statements are shown here:

a. Using the equation from the chapter, calculate the EFN for next year.

b. Construct the firm€™s pro forma statement of financial position for next year and confirm the EFN that you calculated in (a).

c. Calculate the sustainable growth rate for the company.

d. Can Optical Scan eliminate the need for external funds by changing its dividend policy? What other options are available to the company to meet its growth objectives?

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Statement of Comprehensive Income Sales Costs Taxable income laxes Net income $30,400,000 26,720,000 $3,680,000 1,288,000 2,392,000 Dividends Addition to retained earnings $ 956.800 1,435,200 Statement of Financial Position Assets Liabilities and shareholder's equity $ 6,400,000 4,800.000 $ 3,200,000 10,400,000 $13,600.000 iabilities and shareholders' equity $24,800,000 Current assets S 7,200,000 Fixed assets Short-term debt Long-term debt Common stock Accumulated retained earnings 17,600,000 Total equity Total assets S24,800,000