The 2019 financial statements for Growth Industries are presented below

The 2019 financial statements for Growth Industries are presented below.

INCOME STATEMENT, 2019Sales   $340,000 Costs    220,000 EBIT   $120,000 Interest expense    24,000 Taxable income   $96,000 Taxes (at 21%)    20,160 Net income   $75,840 Dividends$22,752    Addition to retained earnings$53,088    

BALANCE SHEET, YEAR-END, 2019 Assets    Liabilities   Current assets    Current liabilities   Cash$3,000  Accounts payable$10,000 Accounts receivable 8,000  Total current liabilities$10,000 Inventories 29,000  Long-term debt 240,000 Total current assets$40,000  Stockholders' equity   Net plant and equipment 280,000  Common stock plus additional paid-in capital 15,000      Retained earnings 55,000 Total assets$320,000  Total liabilities plus stockholders' equity$320,000 

Sales and costs are projected to grow at 40% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 70% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.30.

What is the required external financing over the next year?