It is December 31. Last year, Water and Power Company (W&P) had sales of $80,000,000, and it forecasts that next years sales will be $86,400,000. Its fixed costs have beenand are expected to continue to be$36,000,000, and its variable cost ratio is 15.00%. W&Ps capital structure consists of a $15 million bank loan, on which it pays an interest rate of 12%, and 5,000,000 shares of outstanding common equity. The companys profits are taxed at a marginal rate of 35%.