(Financial forecasting-percent of sales​) Next​ year's sales for Cumberland Mfg. are expected to be $21.85 million. Current sales are $19 million, based on current assets of $6.33 million and fixed assets of $9.50 million. The​ firm's net profit margin is 4 percent after taxes. Cumberland estimates that its current assets will rise in direct proportion to the increase in​ sales, but that its fixed assets will increase by only​ $200,000. Currently, Cumberland has $1.50million in accounts payable​ (which vary directly with​sales), $2 million in​ long-term debt​ (due in 10​ years), and common equity​ (including $3 million in retained​ earnings) totaling $12.33 million. Cumberland plans to pay $0.22 million in common stock dividends next year. a. What are​ Cumberland's total financing needs​ (that is, total​ assets) for the coming​ year? ​$ million (Round to two decimal​ places?
b. Given the​ firm's projections and dividend payment​ plans, what are its discretionary financing​ needs?
c. Based on your​ projections, and assuming that the​ $200,000 expansion in fixed assets will​ occur, what is the largest increase in sales the firm can support without having to resort to the use of discretionary sources of​ financing?