15. How much external financing is needed for a 15% increase in sales? Assume assets and costs vary directly with sales but no current liabilities increase with sales and that the dividend payout ratio remains fixed.

A) $0

B) $34.7 million

C) $53.6 million

D) $23.2 million

E) $27.6 million

Stansfield Corporation

Income Statement ($ in millions)

Sales $300

Costs 250 EBT $ 50 Taxes (34%) 17 Net income $ 33 Retained earnings $ 22 Dividends $ 11 Stansfield Corporation Balance Sheet ($ in millions) Cash $ 5 Accounts payable $ 40 Accounts receivables 40 Notes payable 30 Inventory 65 Current liabilities $ 70 Current assets $110 Long-term debt 155 Net plant & equip. 290 Common stock 75 Retained earnings 100 Total assets $400 Total liab. & equity $400