Income statement:

sales 46,000.00

costs 37,600.00

taxable income 8,400.00

taxes 2,940.00

Net income 5,460.00

Dividends 2,400.00

RE 3,060.00

Balance sheet

current assets:

cash 3,150.00

A/R 4,100.00

inventory 6,400.00

total 13,650.00

fixed assets:

Net P&E 41,300.00

Total assets 54,950.00

Current Liabilites:

A/P 2,475.00

N/P 5,400.00

total 7,875.00

long term debt 28,000.00

owners equity:

common 15,000.00

r/E 4,075.00

total 19,075.00

Total Liability 54,950.00

Using the following income statement and balance sheet make a pro forma balance sheet as in the growth rate of 15% and that the tax rate in dividend payment remain constant cost assets in accounts payable vary with sales but the others do not in the company is operating at 100% capacity use this information to answer the first five questions.

1. what is the proforma value of retained earnings?( from the balance sheet)?

A. 7,594

B. 10,956

C. 8,184

D. 4,614

E. 5,406

2. what is the external financing needed?

A. 3,427

B. 5,919

C. 2,046

D. 3,863

E. 4,352

3. Based on proforma values, calculate the internal growth rate. the internal growth rate is? which is the amount of growth hoffman company can achieve?

4. Based on proforma values, calculate the sustainable growth rate. the sustainable growth rate is? which is the amount of growth Hoffman company can achieve?

5. suppose hoffman company is operating at 80%, rather than 100% capacity. in this situation, full capacity sales would be? and proforma value for net fixed assets would be?