Conn Man’s Shops, a national clothing chain, had sales of $340million last year. The business has a steady net profit margin of 8percent and a dividend payout ratio of 35 percent. The balancesheet for the end of last year is shown next.

Balance Sheet End of Year (in $ millions)
Assets			Liabilities and Stockholders' Equity
Cash	$	34	Accounts payable	$	64
Accounts receivable		29	Accrued expenses		30
Inventory		75	Other payables		59
Plant and equipment		100	Common stock		68
			Retained earnings		17
Total assets	$	238	Total liabilities and stockholders' equity	$	238

The firm's marketing staff has told the president that in thecoming year there will be a large increase in the demand forovercoats and wool slacks. A sales increase of 20 percent isforecast for the company.

All balance sheet items are expected to maintain the samepercent-of-sales relationships as last year,* except for commonstock and retained earnings. No change is scheduled in the numberof common stock shares outstanding, and retained earnings willchange as dictated by the profits and dividend policy of the firm.(Remember the net profit margin is 8 percent.)

*This includes fixed assets since the firm is at fullcapacity.

a. Will external financing be required for thecompany during the coming year?
  

	No
	Yes

b. What would be the need for external financingif the net profit margin went up to 10.00 percent and the dividendpayout ratio was increased to 60 percent?(Negative amount should be indicated by aminus sign. Do not round intermediate calculations.Enter your answer in dollars, not millions, (e.g.,$1,234,567).)
  

	Required new funds