Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
	2016	2015
Sales	$1,150.0	$1,000.0
Operating costs excluding depreciation	970.0	850.0
Depreciation	30.0	25.0
Earnings before interest and taxes	$ 150.0	$ 125.0
Less interest	21.7	20.2
Earnings before taxes	$ 128.3	$ 104.8
Taxes (40%)	51.3	41.9
Net income available to common stockholders	$ 77.0	$ 62.9
Common dividends	60.5	4.4

Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
	2016	2015
Assets
Cash and equivalents	$ 12.0	$ 10.0
Short-term investments	0.0	0.0
Accounts receivable	180.0	150.0
Inventories	180.0	200.0
Total current assets	$372.0	$360.0
Net plant and equipment	300.0	250.0
Total assets	$672.0	$610.0
Liabilities and Equity
Accounts payable	$108.0	$ 90.0
Notes payable	67.0	51.5
Accruals	72.0	60.0
Total current liabilities	$247.0	$201.5
Long-term bonds	150.0	150.0
Total liabilities	$397.0	$351.5
Common stock (50 million shares)	50.0	50.0
Retained earnings	225.0	208.5
Common equity	$275.0	$258.5
Total liabilities and equity	$672.0	$610.0

Suppose 2007 sales are projected to increase by 12.5 percent over 2006 sales. Determine the additional funds needed. Assume that the company was operating with plenty of excess capacity in 2006, that it cannot sell off any of its fixed assets, and that any required financing will be borrowed as notes payable. Also, assume that assets, spontaneous liabilities, and operating costs are expected to increase by the same percentage as sales. Use the percent of sales method to develop a pro forma balance sheet and income statement for December 31, 2007. Use an interest rate of 8 percent on the balance of debt at the beginning of the year to compute interest (cash pays no interest). Use the pro forma income statements to determine the addition to retained earnings and Additional Funds Needed.

Question:

1. What is the projected level of Sales?

2. What is the Projected level of Interest Expense?

3. What is the Change in Retained Earnings?

4. What is the projected level of Current Assets?

5. What is the projected level of Fixed ASsets?

6. What is the projected level of Long Term Debt?

7 What is the level of Retained earnings (total, not just the change)

8. What is the level of projected Total Assets?

9. What is the level of projected Liabilities and owner's equity?

10 What is the Additional Funds Needed (using the proforma technique)?