Please only typewritten answers- no handwritten answers please.

The product and marketing departments at ABC Corp are estimating a growth rate of 15 percent for next year. Consider the two distinct scenarios below:

1. Assume fixed assets increase proportionally to sales and will be depreciated at a similar rate to existing fixed assets.
2. Assume that, to increase production, ABC Corp must set up an entirely new location at a cost of $10,000,000. The new fixed assets will be depreciated at 10% a year.

2. For each of the scenarios above, calculate the EFN for the company assuming the company is operating at full capacity. Can the company's sales increase at this growth rate? What will be the capacity utilization for the company next year?
3. Discuss the methodology used above. What would you likely change if you operated in an environment in which certain balance sheet items dont vary proportionally with sales?

Income Statement
Sales	$80,518,460
COGS	-$58,672,892
Other expenses	-$10,210,200
Depreciation	-$3,608,440
EBIT	$8,026,928
Interest	-$1,261,040
Taxable income	$6,765,888
Taxes (40%)	-$2,706,355
Net income	$4,059,533
Dividends	$1,220,000
Add to RE	$2,839,533
Balance Sheet
Assets		Liabilities and Equity
Current assets			Current liabilities
Cash	$912,870		Accounts payable	$1,858,010
Accounts rec.	$1,466,250		Notes payable	$4,242,700
Inventory	$2,146,360		Total CL	$6,100,710
Total CA	$4,525,480
			Long-term debt	$11,000,000
Fixed assets
Net PP&E	$35,446,860		Shareholder equity
			Common stock	$800,000
			Retained earnings	$22,071,630
			Total equity	$22,871,630
Total Assets	$39,972,340		Total L&E	$39,972,340

Please only typewritten answers- no handwritten answers please.