The most recent financial statements for Karachi Traveler Inc., follow. Sales for 2020 are projected to...

   

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The most recent financial statements for Karachi Traveler Inc., follow. Sales for 2020 are projected to grow by 20 percent. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increased spontaneously with sales. Sales Costs Fixed assets Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (35%) Net income Karachi Traveler Inc Balance Sheet as of December 31, 2019 Assets Current assets Cash Accounts receivable Inventory Total Required: Dividends Addition to retained earnings 67,158 Net plant and equipment Total assets $28,000 Karachi Traveler Inc 2019 Income Statement 49.000 84,000 $161.000 $385,000 $546.000 Accounts payable Liabilities and Owners' Equity Current liabilities Notes payable Total $980,000 770,000 14,000 Long-term debt Owners' equity $196,000 23,800 $172,200 60,270 $111,930 $50,000 $61,930 Common stock and paid-in surplus Retained earnings Total Total liabilities and owners' equity $70,000 7,000 $77,000 $168,000 $21,000 $280,000 $301,000 $546,000 The most recent financial statements for Karachi Traveler Inc., follow. Sales for 2020 are projected to grow by 20 percent. Interest expense will remain constant, the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increased spontaneously with sales. Sales Costs Fixed assets Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes (35%) Net income Karachi Traveler Inc Balance Sheet as of December 31, 2019 Assets Current assets Cash Accounts receivable Inventory Total Required: Dividends Addition to retained earnings 67,158 Net plant and equipment Total assets $28,000 Karachi Traveler Inc 2019 Income Statement 49.000 84,000 $161.000 $385,000 $546.000 Accounts payable Liabilities and Owners' Equity Current liabilities Notes payable Total $980,000 770,000 14,000 Long-term debt Owners' equity $196,000 23,800 $172,200 60,270 $111,930 $50,000 $61,930 Common stock and paid-in surplus Retained earnings Total Total liabilities and owners' equity $70,000 7,000 $77,000 $168,000 $21,000 $280,000 $301,000 $546,000

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To calculate the external financing needed to support the 20 percent growth rate in sales we need to ... View the full answer