Assume that the company, currently operation at full capacity, cannot simply increase fixed assets by 12%. Instead, the firm must buy a new line of business at cost of 5 million dollars. Calculate the external financing needed (EFN) and capacity utilization for next year. Use Excel to create pro - forma financial statements.

S&S Air, INC. 2009 Income Statement Sales Cost of goods sold Other expenses Depreciation EBIT Interest Taxable income Taxes (40%) Net income Dividends $560,000 Add to retained earnings $977,452 $30,499,420 $22,224,580 $3,867,500 $1,366,680 $3,040,660 $478,240 $2,562,420 $1,024,968 $1,537,452 S&S Air, INC. 2009 Balance Sheet Assets Liabilities and Equity Current assets Current liabilities Cash $441,000 Accounts payable $889,000 Accounts receivable $708,400 Notes payable $2,030,000 Inventory $1,037,120 Total current liabilities $2,919,000 Total current assets $2,186,520 Long term debt $5,320,000 Fixed assets Net plant and equipment $16,122,400 Shareholder equity Common stock $350,000 Retained earnings $9,719,920 Total equity $10,069,920 Total assets $18,308,920 Total liabilities and equity $18,308,920