Big Energy Corporation received regulatory approval for its 201 electricity rate. The company has been authorized to charge customers $0.10 per kilowatt-hour (kwh). a rate lower than other utilities in the state charge. Details of the rate calculation follow: Shortly after the 201 rate was set, the company's financial reporting staff circulated an internal memo recommending that it appeal the ruling after making the following accounting changes: 1. Extend plant depreciation life by five years to reflect current utilization forecasts. This would add $175 million to the asset base and reduce annual depreciation (an operating cost) by $5 million. 2. Increase estimated bad debt expense from 1% to 1.5% of sales to reflect current forecasts of customer defaults. This would add $7 million to operating costs and reduce total assets by the same amount. 3. Amortize 200 hostile takeover defense costs of $4.5 million over three years rather than take the entire expense in 200. This action would increase 201 operating costs by $1.5 million and add $3 million to the asset base. 4. Write up fuel and materials inventories to their current replacement value. This action would add $60 million to the asset base, but it would have no impact on 201 operating costs. Required: 1. Assess the impact of the proposed changes on the company's 201 revenue requirement and rate per kilowatt-hour, assuming that regulators will approve the accounting changes and adjust the allowed rate accordingly