1. Following are the Income Statement and comparative Balance Sheets of Nabors, Inc. Nabors, Inc. 2019 Income Statement ($ in millions) Net sales $9,610 Less: Cost of goods sold 6,310 Less: Depreciation 1,370 Earnings before interest and taxes 1,930 Less: Interest paid 630 Taxable income 1,300 Less: Taxes 455 Net income $845 Nabors, Inc. 2018 and 2019 Balance Sheets ($ in millions) 2018 2019 2018 2019 Cash. $310 $405 Accounts payable $2,720 $2,570 Accounts rec. 2,640 3,055 Notes payable. 0 Inventory 3,275 3,850 Long-term debt 7,875 8,100 Net fixed assets 10,960 10,670 Common stock 5,000 5,250 Retained earnings 1,490 2,060 Total assets $17,185 $17.980 Total liab.& equity $17,185 $17,980 Required: a) Calculate Nabors, Inc. cash flows from assets and prove the cash flows generated from asset is used for investors' payments. (10) b) Fixed assets must be increased in specific amounts because it is impossible, as a practical matter, to buy part of a new plant or machine. Assume Nabors, Inc. is currently producing at 100 percent capacity. As a result, to increase production, the company must set up an entirely new line at a cost of $10,000. What would be the EFN in 2020 if the company plans to operate at sustainable growth rate? What does this imply about capacity utilization for next year? (15) c) Interpret EFN and explain the use of plug variables. (5) 100