Reference no: EM131834921
The Most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.
2015 Income Statement
Sales $751,000
Costs $586,000
Other Expenses$ 22,000
Earings before Interest and taxes $143,000
Interest Expense $18,000
Taxable Income $125,000
Taxes (40%) $50,000
Net Income $75,000
Dividends $30,000
Addition to retained earnings $45,000
Balance Shhet as of December 31,2015
Assets
Current Assets
Cash $21,040
Accounts Receivable $33,360
Inventory $70,230
Total $ 124,720
FIxed Assets
Net Plant and equipment $240,000
Total Assets $364,720
Liabilities and Owner;s Equity
Current liablities
Accouts Payable $55,200
Notes Payable $14,400
Total $69,600
Long Term Debt $134,000
Owners equity
Common Stock and paid in surplus $120,000
Retained Earnings $41,420
Total $161,120
Total liabilities and owner's equity $364,720
If the firm is operating at full capacity and no new debt or equity is issued, what external finaning is needed to support the 20 percent growth rate in sales?