The most recent

Problem 3-21 Calculating EFN The most recent financial statements for Scott, Inc., appear below. Sales for 2020 are projected to grow by 25 percent. Interest expense will remain constant, the tak rate and the dividend payout rate also will remain constant Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales SCOTT, INC. 2019 Income Statement Sales $760,000 Costs 595.000 Other expenses 31000 $ 134,000 27,000 Earnings before interest and taxes Interest expense Taxable income Taxes (22%) Net income $ 107.000 23,540 $ 83,460 Dividends $25,038 Dividends Addition to retained earnings $25,038 58,422 SCOTT, INC. Balance Sheet as of December 31, 2019 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 21,940 Accounts payable $ 56,100 Accounts receivable 44,880 Notes payable 15,300 Inventory 104.960 Total $ 71,400 Total $ 171780 Long-term debt $ 143,000 Fixed assets Net plant and equipment $436,000 Owners' equity Common stock and paid-in surplus Retained earnings $ 121,000 272,380 Total $393,380 Total assets $ 607780 Total liabilities and owners equity $ 607,780 If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 25 percent growth rate in sales? (Put your final answer in the grey box, and show your work in the white text box for partial marks.) EFN