Question: Given the following information for Manhattan Inc.: current assets = $200; fixed assets = 300; accounts payable = $40; accruals = $50; long-term debt =$110;

Given the following information for Manhattan Inc.: current assets = $200; fixed assets = 300; accounts payable = $40; accruals = $50; long-term debt =$110; equity = $300; sales = $250; costs = $200; tax rate = 35%; dividends = $13. Costs, assets, and accounts payable, accruals (wages and taxes payable) maintain a constant ratio to sales (i.e. grow at the same rate as sales =g). The dividend payout ratio is constant, and projected sales = $300. (i) what is the implied growth rate (g) in sales? () what is the external financing needed? (ili) Suppose, instead, Manhattan, Inc. is operating at 75% capacity with respect to the use of its fixed assets. Would the firm need to increase fixed assets to support sales growth (just answer 'Yes' or 'No', and show the (one) calculation that led to your conclusion). If you answer is 'Yes', what is the firm's forecasted fixed assets and EFN?

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