3. In spite of recent drops in sales, Cola Cola is placing its bets on school children frantically gulping down sodas as schools reopen. It is projecting an 8% increase in sales for this year and it wants to prepare a proforma income statement. Cola Cola knows that depreciation will remain the same ($8,000) and interest expense will increase to $16,000 in 2020. Cola Cola also has a constant dividend payout ratio that it will maintain for the year (in other words, the dividend payout ratio for 2020 will be the same as it was for 2019). Use the 2019 income statement below to answer the following questions. Cola Cola Income Statement - Dec. 31, 2019 Sales $935,000 Costs or Goods Sold $723,000 SG&A $19.000 Depreciation $8,000 EBIT $185.000 Interest expense $14.000 Taxable income $171.000 Taxes (34%) $58,140 Net income $112,860 Dividends $45,144 Addition to R/E $67,716 a. Calculate Cola Colas dividend payout ratio. b. Use percentage of sales to prepare a pro-forma income statement for 2020 based on the 8% expected increase in sales. Include dividends and retained earnings. c. What does the percentage of sales method assume about costs of goods sold (COGS) and selling, general and administrative (SG&A) expenses? Would you expect these costs to be higher or lower than projected in 2020? Explain your