The most recent financial statements for Marvellous Corporation follow

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The most recent financial statements for Marvellous Corporation follow. Sales for 2021 are projected to increase by 15 percent. Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant dividend pay-out ratio. The firm is operating at full capacity and no new debt or equity is issued.

2020 Income Statement			Balance Sheet as at 31 December 2020
Sales Costs Taxable income Taxes (25%) Net income Dividends	€15,800 11,000 €4,800 1,200 €3,600 €1,440		Current assets Fixed assets Total assets	€7,800 17,200 €25,000	Current liabilities Long-term debt Equity Total liabilities & equity	€4,200 7,400 13,400 €25,000

Instructions:

1. a) Calculate internal and sustainable growth rates, and explain what they mean. (10 points)

2. b) Prepare Proforma Income Statement for 2021, calculate dividends and addition to retained earnings in 2021. (10 points)

3. c) Prepare Proforma Balance Sheet for 2021. (10 points)

4. d) Calculate the amount of external financing needed in 2021, and explain what financing options are available for the company. (5 points)