Re-boot Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, and ships them to its chain of retail stores. Re-boot's balance sheet as of December 31, 2012, is shown here (millions of dollars).

Sales for 2012 were $280 million, while net income for the year was $10.5 million. Re-boot paid dividends of $4.2 million to common shareholders. The firm is operating at full capacity. Assume that all ratios remain constant.
a. If sales are projected to increase by $70 million, or 25%, during 2013, use the AFN equation to determine Re-boot's projected external capital requirements.
b. Using the AFN equation, determine Re-boot's self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ non-spontaneous external funds?
c. Construct Re-boot's pro forma balance sheet for December 31, 2013. Assume that all external capital requirements are met by bank loans and are reflected in notes payable. Assume the company's profit margin and dividend payout ratio remain constant?

Cash Receivables Inventories Total current assets Net fixed assets $3.5 26.0 58.0 87.5 35.0 Accounts payable Notes payable Accruals Total current liabilities Mortgage loan Common stock Retained earnings Total liabilities and equity $ 9.0 18.0 8.5 35.5 6.0 15.0 66.0 22.5 Total assets $122.5 $1 3