A firm has decided that its optimal capital structure is 100% equity financed. The firm's asset is $100,000; asset turnover (sales/assets) is 0.8. If increase in sales is projected to be 10%, and sustainable growth rate is 5%,
a) Calculate the required external financing that the firm needs.
b) Now, if increase in sales is projected to be 20%, and it is required to have $6,000 more to finance increase in sales, what will be the sustainable growth rate of this firm?