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External Funds Needed The Optical Scan Company has forecast a 20 percent sales growth rate...

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Finance

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External Funds Needed The Optical Scan Company has forecast a 20 percent sales growth rate for next year. The current financial statements are shown here: 3.8 Statement of Comprehensive Income Sales Costs Taxable income Taxes Net income $30,400,000 26,720,000 $ 3,680,000 1,288,000 $ 2,392,000 Dividends Addition to retained earnings $ 956,800 1,435,200 Statement of Financial Position Assets Liabilities and shareholder's equity Current assets 7,200,000 Short-term debt Fixed assets 17,600,000 Long-term debt Common stock $6,400,000 4,800,000 $3,200,000 10,400,000 $13,600,000 $24.800,000 Accumulated retained earnings Total equity Total liabilities and shareholders' equity Total assets a. Using the equation from the chapter, calculate the EFN for next year. b Construct the firm's pro forma statement of financial position for next year and $24,800,000 confirm the EFN that you calculated in (a). c. Calculate the sustainable growth rate for the company. d. Can Optical Scan eliminate the need for external funds by changing its dividend policy? What other options are available to the company to meet its growth objectives

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