4. (Optional) Recall that Idexo plans to maintain only the minimal necessary cash and pay out all excess cash as dividends.

a. Suppose that at the very end of 2013 Ferris plans to use all excess cash to pay an immediate dividend. How much cash can the firm pay out at this time? Compute a new 2013 balance sheet reflecting this dividend using the spreadsheet on page 666.

b. Forecast the cash available to pay dividends in future years—the firm’s free cash flow to equity—by adding any new borrowing and subtracting after-tax interest expenses from free cash flow each year. Will Idexo have sufficient cash to pay dividends in all years? Explain.

c. Using your forecast of the firm’s dividends, construct a pro forma balance sheet for Idexo over the next five years.