Forecast the Pro forma Financial Statements for Company C using the % of Sales Method assuming: sales increase by $100,000 in 2017; the company must increase Fixed Assets to $200,000 to support the higher level of production; all new financing will come from additional debt, and the payout ratio, the effective tax rate, and the rate of interest on debt will remain unchanged from 2016. Based on two iterations, what do you forecast for the amount of debt and the D/E-ratio required to support this new growth?

Campany C Iteration 2 2D1 T Iteration 1 2i] 1 T Pre Fc-rma Income Statement Actual 2D1B '11: of Sales Sales {$DDD) G EBIT Interest Expense Pret bet. Taxes Taxes Net Inceme Dividend Paent Payout Ratie Tax Rate Int. Rate D En ace-i=- C'F'llM-ih-m was: Arm-heals: use: [1.1 2 Pre Fc-rma Balance Sheet Actual 2D1 '11: of Sales Iteratien 2 2D1 T Iteratien 1 2i] 1 T |[lash ($131111) E :e Inventery Fixed Assets .5. w'Eq M (II E .0 Debt Steclchelder's Equi Tetal EFN Addn te RE G." 'h'h Jill-CD can: Ln: 'i-J U'l