Problem

EFN The most recent financial statements for Martin, Inc., are shown here: Income Sta...

EFN The most recent financial statements for Martin, Inc., are shown here:

Income Statement

 

Balance Sheet

 

Sales

$25,800

Assets

$113,000

Debt

$ 20,500

Costs

16,500

 

 

Equity

92,500

Taxable income

$ 9,300

Total

$113,000

Total

$113,000

Taxes (34%)

3,162

 

 

 

 

Net income

$ 6,138

 

 

 

 

Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,841.40 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $30,960. What external financing is needed?

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