9. A spreadsheet containing R&E Supplies 2018 pro forma financial forecast, as shown in Table 3.5, is available for download from McGraw-Hill's Connect or your course instructor (see the Preface for more information). Using the spreadsheet information presented next, and the modified equations determined in question 8 earlier, extend the forecast for R&E Supplies contained in Table 3.5 through 2019. R&E Supplies Assumptions for 2019 (S thousands) Growth rate in net sales 30.0% Tax rate 45.0% Cost of goods sold/net sales 86.0% Gen, sell, & admin. Dividend/earnings after tax 50.0% Current assets/net sales 29.0% expenses/net sales 11.0% Net fixed assets $270 Long-term debt $560 Current liabilities/net sales 14.4% Current portion long-term debt $100 Interest rate 10.0% a. What is R&E's projected external financing required in 2019? How does this number compare to the 2018 projection? b. Perform a sensitivity analysis on this projection. How does R&E's projected external financing required change if the ratio of cost of goods sold to net sales declines from 86.0 percent to 84.0 percent? c. Perform a scenario analysis on this projection. How does R&E's projected external 2 Year 2017 Actual 2018 2019 3 Net sales $20,613 4 Growth rate In net sales 25.0% 5 Cost of goods sold/net sales 86.0% 6 Gen., sell., and admin. expenses/net sales 12.0% 7 Long-term debt $ 760 $660 8 Current portion long-term debt $ 100 $100 9 Interest rate 10.0% 10 12 13 14 Tax rate 11 Dividend/earnings after tax Current assets/net sales Net fixed assets Current liabilities/net sales 15 Owners' equity 45.0% 50.0% 29.0% $280 14.5% $ 1,730 16 INCOME STATEMENT 17 18 Year 19 Net sales 20 Cost of goods sold 21 Gross profit 22 Equations 2018 Forecast Forecast 2018 2019 =B3+ B3 C4 $25,766 = C5C19