Reference no: EM131992607

The 2017 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2017 Sales $ 260,000 Costs 180,000 EBIT $ 80,000 Interest expense 16,000 Taxable income $ 64,000 Taxes (at 35%) 22,400 Net income $ 41,600 Dividends $ 12,480 Addition to retained earnings 29,120 BALANCE SHEET, YEAR-END, 2017 Assets Liabilities Current assets Current liabilities Cash $ 9,000 Accounts payable $ 16,000 Accounts receivable 14,000 Total current liabilities $ 16,000 Inventories 27,000 Long-term debt 160,000 Total current assets $ 50,000 Stockholders’ equity Net plant and equipment 200,000 Common stock plus additional paid-in capital 15,000 Retained earnings 59,000 Total assets $ 250,000 Total liabilities and stockholders' equity $ 250,000 Sales and costs are projected to grow at 20% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.30. What is the required external financing over the next year? (Negative amounts should be indicated by a minus sign.)