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The most recent financial statements for ABC Inc. are shown here: Sales          10,000.00 CA    12,000.00 CL...

  1. The most recent financial statements for ABC Inc. are shown here:

Sales

         10,000.00

CA

   12,000.00

CL

     2,400.00

Costs

           8,000.00

Fixes Assets

   13,000.00

LTD

     4,800.00

EBT

           2,000.00

Equity

   17,800.00

Tax@21%

               420.00

Total

   25,000.00

   25,000.00

NI

           1,580.00

All the assets, costs, and CL are proportional to sales and the sales are projected to increase by 12 percent. Long-term debt and equity are not proportional to sales but the firm expects to borrow a net $1,000 as long-term debt and reduce its equity by $500 during the year. The company follows a policy of a constant 40 percent dividend payout ratio. What is the external financing need?

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