Break-Even Decisions Return all assumptions to their initial (Part A) values, including returning sales growth back to the average of the previous two years, and returning SG&A/Sales and PPE/Sales back to the average of the previous 3 years. (The Undo button can do this quickly.) Assume now that New England Corp. has determined that they cannot exceed $100 million in long-term debt. So they are looking for other ways to remedy the shortfall in financing. Determine what changes they would have to make under the following options:

1). What if they opt to remedy the shortfall by reducing sales growth? What is the highest growth rate they could achieve and not exceed the debt limit? 

2). Return sales growth to its initial level (average of previous 2 years). Now suppose that they want to remedy the shortfall by cutting the dividend payout ratio. Will this get them under the debt ceiling? 

3). Return the dividend payout rate to its initial level (average of previous 3 years). Now suppose that they want to remedy the shortfall by using fixed assets more efficiently (i.e., by cutting PPE/Sales). Use Solver to find what PPE/Sales would have to be reduced to in order to stay under the debt ceiling.