8.) Silkworm Inc is a manufacturer of construction equipment, machinery and engines. It also sells financial services. You anticipate a substantial increase in its machinery sales. You have the following data US$ '000 Net sales COGS SG&A 2018 39.867 30,367 4,248 2019 57,382 43,578 5,203 and thus in percentage terms: % of sales Net sales COGS SG&A 2018 100 78.2 10.7 2019 100 75.9 9.1 a) Estimate the fixed and variable components of COGS and SG&A in 2019. What would be your estimate of operating profits for 2020 if predicted net sales for 2020 were US$ 100,000,000? Briefly comment on whether your analysis makes sense. What are the advantages and disadvantages of this approach? (7 marks)