Review Mini Case Planning for Growth at S S Air in your textbook on page 129, also found at the end of Chapter 4 in your textbook Then, answer the following questions Calculate the internal growth rate and sustainable growth rate for S S Air What do these numbers mean How do you know S S Air is planning for a growth rate of 12 next year Calculate the EFN for the company assuming the company is operating at full capacity Can the companys sales increase at this growth rate Explain your reasoning Most assets can be increased as a percentage of sales For instance, cash can be increased by any amount However, fixed assets must be increased in specific amounts because it is impossible, as a practical matter, to buy part of a new plant or machine In this case, a company has a staircase or lumpy fixed cost structure Assume S S Air is currently producing at 100 capacity As a result, to increase production, the company must set up an entirely new line at a cost of $5,000,000 Calculate the new EFN with this assumption What does this imply about capacity utilization for the company next year

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Review Mini Case: Planning for Growth at S&S Air in your textbook on page 129, also found at the end of Chapter 4 in your

Review Mini Case: Planning for Growth at S&S Air in your textbook on page 129, also found at the end of Chapter 4 in your textbook. Then, answer the following questions:

Calculate the internal growth rate and sustainable growth rate for S&S Air. What do these numbers mean? How do you know?
S&S Air is planning for a growth rate of 12% next year. Calculate the EFN for the company assuming the company is operating at full capacity. Can the companys sales increase at this growth rate? Explain your reasoning.
Most assets can be increased as a percentage of sales. For instance, cash can be increased by any amount. However, fixed assets must be increased in specific amounts because it is impossible, as a practical matter, to buy part of a new plant or machine. In this case, a company has a staircase or lumpy fixed cost structure. Assume S&S Air is currently producing at 100% capacity. As a result, to increase production, the company must set up an entirely new line at a cost of $5,000,000. Calculate the new EFN with this assumption. What does this imply about capacity utilization for the company next year?