Broadway Company is deciding whether to acquire Landmark Company. Use the following information to create the proforma financial statements (Income Statement, Balance Sheet and Statement of Cash Flows) for years 2015- 2020 under the assumption that a mix of debt and equity will be used to finance the acquisition.

- Broadway's revenue would decline by 10% in years 2015 & 2016; then grow at 9% for the years 2017, 2018 & 2019 & 4.5% thereafter.

- Operating expenses as a percentage of sales would remain constant at 2%, starting in 2015.

- Depreciation would grow by $200,000 a year. The corporate tax rate is 35%.

- Under the mix of debt & equity financing: A group of investors would provide $60 million each in loans and equity. The loan would carry 5% interest rate and mature at end of the year 2020. The loan principal of $60million would be due in its entirety upon maturity.

Exhibit 3b Five-year Forecast of Broadway's Income and Cash Flow, 2015-2019 ($ millions)* 2015 168.4 6.7 0.4 4.1 3.1 0.4 4.2 2.8 2016 Net sales Operating profit Interest expense Net income Depreciation and amortization Change in net working capital Capital e Total FC 2017 175.1 182.1 7.3 0.4 4.5 3.5 0.4 4.6 3.3 7.0 0.4 4.3 3.3 0.4 4.4 3.1 2018 189.4 7.6 0.4 4.7 3.7 0.4 4.7 3.5 2019 197.0 7.9 0.4 4.9 3.9 0.4 4.9 3.7 iture Numbers in the exhibits are based on the assumption that Broadway does not acquire Landmark. Exhibit 3b Five-year Forecast of Broadway's Income and Cash Flow, 2015-2019 ($ millions)* 2015 168.4 6.7 0.4 4.1 3.1 0.4 4.2 2.8 2016 Net sales Operating profit Interest expense Net income Depreciation and amortization Change in net working capital Capital e Total FC 2017 175.1 182.1 7.3 0.4 4.5 3.5 0.4 4.6 3.3 7.0 0.4 4.3 3.3 0.4 4.4 3.1 2018 189.4 7.6 0.4 4.7 3.7 0.4 4.7 3.5 2019 197.0 7.9 0.4 4.9 3.9 0.4 4.9 3.7 iture Numbers in the exhibits are based on the assumption that Broadway does not acquire Landmark