Conn Man’s Shops, a national clothing chain, had sales of $330million last year. The business has a steady net profit margin of 7percent and a dividend payout ratio of 30 percent. The balancesheet for the end of last year is shown.

Balance Sheet End of Year (in $ millions)
Assets			Liabilities and Stockholders' Equity
Cash	$	33	Accounts payable	$	53
Accounts receivable		28	Accrued expenses		21
Inventory		74	Other payables		58
Plant and equipment		129	Common stock		66
			Retained earnings		66
Total assets	$	264	Total liabilities and stockholders' equity	$	264

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 10 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 7 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 8.50 percent and the dividendpayout ratio was increased to 60 percent? (Negative amountshould be indicated by a minus sign. Do not round intermediatecalculations. Enter your answer in dollars, not millions, (e.g.,$1,234,567).)