Financial Management 1 BFIN 2409 Spring-1, 2019 Question 4 40 Points This question requires that you complete and then print and attach the Excel file entitled "HW#1 _Template-Spring201 9.xlsx" found on Courseweb The Strathman Corporation, a metal forming company, had the following year-end results Strathman Corporation Sales Costs IBT (margin) Taxes Net income S 30,700,000 27,016,000 3,684,000 773,640 2,910,360 12.0% margin 21% Dividends Addition to retained earnings 1,156,800 1,753,560 Current assets Net fixed assets S 7,200,000 Short-term debt 17,600,000 Long-term debt $ 6,400,000 4,800,000 Common stock Accumulated retained earnings Total equity $ 3,200,000 10,400,000 13,600,000 Total assets S 24,800,000 Total L&E 24,800,000 For next year, Strathman is making the following planning assumptions Revenue growth: 7.5% . IBT Margin: 1 percentage point higher than current year (to 13%) . Tax Rate: Unchanged . Dividends: Same dollar amount as current year Current Assets: Increase 2% faster than the sales growth rate . Net Fixed Assets: $2.5 million net increase Long-Term Debt: Repay $0.6 million Repurchase $1.8 million in common shares (a reduction in Common Stock) (A) What amount of Short-term Debt will be needed in Box 1 to make this plan possible? (You will need to make a pro forma forecast of the table above to answer this question.) (B) Your bank then tells you that your Short-Term Debt is limited to $9.0 million. To comply with this cap, you decide to defer the purchase of a fourth machining center and thus cut the capital spending plan by $600,000 to a S1,900,000 net increase (instead of S2,500,000 increase); and you also decide to reduce the sales forecast. All the other parameters set out in Part (A) continue to apply. What is the new growth rate in sales in Box 2 (percentage to one decimal point, like x.x%) that you can support with the Short- Term Debt constraint