Forecast the financial statements for Denny's Bakery for Year 5 using the assumptions below, and answer the questions that follow.

1. Sales growth of

10.0 %

10.0%.

2. The cost of debt is

9 %

9% of last period's long-term debt.

3. The tax rate is

35 %

35%.

4. The depreciation rate is

15 %

15%.

5. CAPEX is

$ 200 comma 000

$200,000.

6. The following accounts are held constant: Goodwill & Intangibles, and Common Stock.

7. Long-term debt is the PLUG account

8. No dividends.

Selected Ratios

Denny's Bakery Year 4

Cost of Goods Sold/Sales

0.800084175

SG&A/Sales

0.031144781

Current Assets/Sales

0.287037037

Current Liabilities/Sales

0.135101010

Past financial statements for Denny's Bakery are shown here

a. From the forecasted financial statements, what are the additional funds needed (AFN) in Year 5?

b. Using the equation approach, what are the AFN in Year 5?

c. What is the maximum internal growth rate?

d. What is the maximum sustainable growth rate?

*WHAT I NEED ANSWERS TO*

Cost of Goods Sold:

SG and A:

Depreciation Expense:

EBIT:

Interest Expense:

Earnings before Taxes:

Income Taxes:

Net Income: