86 92 C. Use the following assumptions to answer the questions below: (1) Operating ratios remain unchanged. (2) Sales will grow by 11.1%, 87 8%, 5%, and 5% for the next four years. (3) The target weighted average cost of capital (WACC) is 10%(4) Rate on all debt is 8%, (5) Dividends will grow at the same rate as sales. 88 99 90 91 Scenario: No Change 93 Actual Forecast 94 Inputs 2021 2022 2023 2024 2025 95 Sales growth rate 96 (Op. costs)/Sales: 90.00% 97 Depr./FA 10.00% 98 Cash/Sales: 1.00% 99 (Acct.rec.)/Sales 14.00% .00 Inv./Sales: 16.00% 01 FA/Sales: 40.00% 02 (AP & accr./Sales: 18.00% 03 Tax rate: 25.00% 04 Rate on all debt 8.00% 05 Div.growth rate: 5.00% 06 Target WACC 10.00% 07 08 86 92 C. Use the following assumptions to answer the questions below: (1) Operating ratios remain unchanged. (2) Sales will grow by 11.1%, 87 8%, 5%, and 5% for the next four years. (3) The target weighted average cost of capital (WACC) is 10%(4) Rate on all debt is 8%, (5) Dividends will grow at the same rate as sales. 88 99 90 91 Scenario: No Change 93 Actual Forecast 94 Inputs 2021 2022 2023 2024 2025 95 Sales growth rate 96 (Op. costs)/Sales: 90.00% 97 Depr./FA 10.00% 98 Cash/Sales: 1.00% 99 (Acct.rec.)/Sales 14.00% .00 Inv./Sales: 16.00% 01 FA/Sales: 40.00% 02 (AP & accr./Sales: 18.00% 03 Tax rate: 25.00% 04 Rate on all debt 8.00% 05 Div.growth rate: 5.00% 06 Target WACC 10.00% 07 08