The Optical Scam Company has forecast an 17 percent sales growth rate for next year. The...

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Finance

The Optical Scam Company has forecast an 17 percent sales growthrate for next year. The current financial statements are shownbelow. Current assets, fixed assets, and short-term debt areproportional to sales.
INCOME STATEMENT
  Sales $ 44,000,000
  Costs 35,200,000
  Taxable income $ 8,800,000
  Taxes 3,080,000
  Net income $ 5,720,000
       Dividends $ 1,430,000
       Additions to retainedearnings $ 4,290,000
BALANCE SHEET
Assets Liabilities and Equity
  Current assets $ 14,040,000   Short-term debt $ 10,560,000
  Long-term debt 11,060,000
  Fixed assets 37,000,000
  Common stock $ 3,700,000
  Accumulated retained earnings 25,720,000
       Total equity $ 29,420,000
  Total assets $ 51,040,000   Total liabilities and equity $ 51,040,000

  External funds needed $


  Sustainable growth rate %

Suppose Optical Scam eliminates its dividend entirely. What isthe new EFN?

New External funds needed $

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The Optical Scam Company has forecast an 17 percent sales growthrate for next year. The current financial statements are shownbelow. Current assets, fixed assets, and short-term debt areproportional to sales.INCOME STATEMENT Sales$44,000,000 Costs35,200,000 Taxable income$8,800,000 Taxes3,080,000 Net income$5,720,000 Dividends$1,430,000 Additions to retainedearnings$4,290,000 BALANCE SHEETAssetsLiabilities and Equity Current assets$14,040,000 Short-term debt$10,560,000 Long-term debt11,060,000 Fixed assets37,000,000 Common stock$3,700,000 Accumulated retained earnings25,720,000 Total equity$29,420,000 Total assets$51,040,000 Total liabilities and equity$51,040,000 External funds needed$ Sustainable growth rate% Suppose Optical Scam eliminates its dividend entirely. What isthe new EFN? New External funds needed$

Sales			$	44,000,000
Costs				35,200,000

Taxable income			$	8,800,000
Taxes				3,080,000

Net income			$	5,720,000

Dividends	$	1,430,000
Additions to retainedearnings	$	4,290,000

BALANCE SHEET
Assets			Liabilities and Equity
Current assets	$	14,040,000	Short-term debt	$	10,560,000
			Long-term debt		11,060,000
Fixed assets		37,000,000

			Common stock	$	3,700,000
			Accumulated retained earnings		25,720,000

			Total equity	$	29,420,000

Total assets	$	51,040,000	Total liabilities and equity	$	51,040,000