a) Discuss the process of preparing a financial plan. b) What is the implied level of assets at the end of 2016? c) If the company pays out 50% of net income as dividends, how much cash will Drake need to raise in the capital markets in 2016? d) If Drake is unwilling to issue any new shares to support the growth, what will be the debt ratio at the end of 2016?

The following table summarizes the 2015 income statement and end-year balance sheet of Drake's Bowling Alleys (DBA). Income Statement (2015, figures in $000s) Sales 1,000 Notes: 40% of average assetsa Costs 750 75% of sales Interest expense 25 5% of debt at start of yearb Pre-tax profit 225 Tax 90 40% tax rate Net Income 135 Balance Sheet (year-end 2015, figures in $000s) Assets 2,600 Debt Equity 2,100 Total 2,600 Total 2,600 a Assets at year-end 2013 = $2,400,000 bDebt at year-end 2013 = $600,000 500 DBA's financial manager forecasts a 10% increase in sales and costs in 2016. The ratio of sales to average assets is expected to remain at 0.40. Interest is forecasted at 5% of debt at the start of the year