Make Me , Inc. is currently operating at maximum capacity. All costs, assets, and current liabilities vary directly with sales. The tax rate and the dividend payout ratio will remain constant. How much additional debt is required if no new equity is raised and sales are projected to increase by 10 percent next year?

Net sales Less: Cost of goods sold Less: Depreciation Earnings before interest and taxes Less: Interest paid Taxable Income Less: Taxes Net income $7,500 6,415 200 885 25 $ 860 300 $ 560 Dividends Addition to retained earnings $252 $308 2018 Balance Sheet Cash Accounts rec. Inventory Total Net fixed assets Total assets 2018 $1,050 850 2,100 $4,000 1,600 $5,600 Accounts payable Long-term debt Common stock Retained earnings 2018 $1,750 330 2,500 1,020 Total liabilities & equity $5,600