one long question

Now make the following assumptions: - Sales are expected to increase by 20 percent in Year 1. - Operating costs are expected to increzse to 64.0 percent of sales. - Fixed assets are being used at 90 percent of capacty. - Fixed assets are lumpy. If the fim must add fued assetsit must add a lump-5um of $2,000,000. - Fixed assets are currentiv being depreciated on a strajght line basis over a 10 -year period. New fred assets willalso be depreciated on a stright line basis over 10 years. - All current assets and spontaneous liabitities can be eppressed as a percent of sales and will grow proportionately with sales. - At the start of the coming year, notes payable and long tereriri debt will not initially change. However, the notes gaybale account will be used to tund the AFN for the second pass. - The before-tax interest rete on notes paydobe and ore will enriain as a percent of sales and will grow proportionately with seles. - At the start of the coming year, notes payable and long-term debt will not initially change. However, the notes payable account will be used to fund the AFN for the seccond pass. - The before-tax interest rate on notes payable and long-term debt is currently 8 percent. Over the coming yearitwill remain at 8% for the long.term debt, but wil increase to 12% for the notes payable. - The tax rate will remain at 40 percent. - The firm will increase its dividend payout rate from 40 percent to 50 percent of net income in Year 1, rezardess of whether any new equity is issued. Using the spreadsheet method, and given the infomation above, do a first pass and calculate the additional funds needed. Then do a second pass, assuming that AFN is handed through the notes payable (NP) account, either increasing or reducing NP. Given this information, determine what the retum on equity N// Equity is expected to be based on projections ater the seccond pass ignoing the remaining AFN after the second pass.). Enter your answer in decimal format, tuncated to 3 decinal places. For example, if your answer is 3279%, enter 0.3277