$3.$ Mr DIY is evaluating its financial needs for the year $2024.$ The company$$s CFO suggests that the relationship between sales, operating expenses, current liabilities, and total assets will remain at their current proportion of sales.

In $2023,$ Mr DIY had RM$3$ million in sales and net income of RM$0\mathrm{.}5$ million. According to Mr DIY$$s evaluation of the market and latest developments in the company$$s successful sales strategy, it expects to increase sales to RM$4$ million. Based on balance sheet from $2023,$ use notes payable as a balancing entry. How much new financing will Mr DIY need next year if the payout ratio is $40\%?$

Mr DIY

Balance Sheet as at December $31$st $2023$

ASSETS

Current assets

Net fixed assets

Total Assets RM

$410,000$

$1,150,000$

$1,560,000$

LIABILITIES AND OWNERS$$ EQUITY

Accounts payable

Long$-$term debt

Total liabilities

Common stock

Paid$-$in capital

Retained earnings

Common equity

Total Liability and owners$$ equity

$450,000$

$350,000$

$800,000$

$100,000$

$210,000$

$450,000$

$760,000$

$1,560,000$

The firm expects its sales to increase by $20\%$ in $2022.$ All the asset and current liabilities vary with sales. The COGS and the operating cost are $20\%$ from its sales. The interest expenses are increasing by RM$200,000,$ while depreciation expense will increase by RM$200,000$ in next year. Tax rate will remain the same. The firm decides to suspend the dividend to its shareholders in the next year.