Final answer:
The calculation of external financing needed for Cavalier Corp.'s 15% growth cannot be completed without the tax rate. However, the process involves calculating the increases in assets and liabilities due to growth, determining retained earnings, and then subtracting these from the required increase in assets to find the external financing needed.
Step-by-step explanation:
The external financing needed to support Cavalier Corp.'s growth rate of 15% for the next year cannot be directly answered with the provided information alone. External financing is calculated based on projected increases in assets and what portion of that increase can be funded through internal financing, such as retained earnings. To calculate this, we need to determine the increase in assets required to support the growth (which is 15% of $913,600) then subtract any increase in liabilities (also growing at 15%) and any internally generated funds, such as retained earnings. The net income minus dividends gives us the retained earnings, which is part of the internal financing for growth.
Unfortunately, since a specific tax rate is mentioned to be constant but is not provided, we cannot calculate the exact amount of external financing needed without this piece of information. A tax rate is necessary to calculate net income accurately, which affects the retained earnings. An estimate can be made assuming the tax rate causes no change in retained earnings, but it would not be fully accurate.