Start with the partial model in the file Ch12 P10 Build a Model.xls on the textbook?s Web site, which contains the 2013 financial statements of Zieber Corporation. Forecast Zeiber's 2014 income statement and balance sheets. Use the following assumptions: (1) Sales grow by 5.5%. (2) The ratios of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, and inventories to sales will be the same in 2014 as in 2013. (3) Zeiber will not issue any new stock or new long-term bonds. (4) The interest rate is 13% for long-term debt and the interest expense on long-term debt is based on the average balance during the year . (5) No interest is earned on cash. (6) Dividends grow at an 6.5% rate. (6) Calculate the additional funds needed (AFN). If new financing is required, assume it will be raised by drawing on a line of credit with an interest rate of 12%. Assume that any draw on the line of credit will be made on the last day of the year, so there will be no additional interest expense for the new line of credit. If surplus funds are available, pay a special dividend. Please attach the excel with formula and solutions. Urgent help required.

Chapter: Problem: 12 10 Start with the partial model in the file Ch12 P10 Build a Model.xls on the textbook's Web site, which contains the 2013 financial statements of Zieber Corporation. Forecast Zeiber's 2014 income statement and balance sheets. Use the following assumptions: (1) Sales grow by 5.5%. (2) The ratios of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, and inventories to sales will be the same in 2014 as in 2013. (3) Zeiber will not issue any new stock or new long-term bonds. (4) The interest rate is 13% for long-term debt and the interest expense on long-term debt is based on the average balance during the year . (5) No interest is earned on cash. (6) Dividends grow at an 6.5% rate. (6) Calculate the additional funds needed (AFN). If new financing is required, assume it will be raised by drawing on a line of credit with an interest rate of 12%. Assume that any draw on the line of credit will be made on the last day of the year, so there will be no additional interest expense for the new line of credit. If surplus funds are available, pay a special dividend. a. What are the forecasted levels of notes payable and special dividends? Key Input Data: Used in the forecast 40.0% 6.5% 8.0% 13.0% 12.0% Tax rate Dividend growth rate Rate on notes payable-term debt, rstd Rate on long-term debt, rd Rate on line of credit, rLOC December 31 Income Statements: (in thousands of dollars) Sales Expenses (excluding depr. & amort.) Depreciation and Amortization EBIT Interest expense on long-term debt Interest expense on line of credit EBT Taxes (40%) Net Income Common dividends (regular dividends) Special dividends Addition to retained earnings (DRE) Forecasting 2013 2014 2013 basis Ratios Inputs $455,150 Growth $386,878 % of sales $14,565 % of fixed assets $53,708 $11,880 Interest rate x average debt during year $0 $41,828 $16,731 $25,097 $12,554 Growth 6.50% $0 $12,543 December 31 Balance Sheets (in thousands of dollars) 2013 Assets: Cash Forecasting basis $18,206 % of sales 2013 Ratios 2014 Inputs Without adj. Accounts Receivable Inventories Total current assets Fixed assets Total assets $100,133 % of sales $45,515 % of sales $163,854 $182,060 % of sales $345,914 Liabilities and equity Accounts payable Accruals Line of credit Total current liabilities Long-term debt Total liabilities Common stock Retained Earnings Total common equity Total liabilities and equity $31,861 % of sales $27,309 % of sales $0 Previous $59,170 $120,000 Previous $179,170 $60,000 Previous $106,745 Previous + DRE $166,745 $345,914 Increase in spontaneous liabilities (accounts payable and accruals) + Increase in long-term bonds, preferred stock and common stock + Net income minus regular common dividends Increase in financing Increase in total assets Amount of deficit or surplus financing: If deficit in financing (negative), draw on line of credit If surplus in financing (positive), pay special dividend contains the 2013 heets. Use the ixed assets, cash 3) Zeiber will not interest expense h. (6) Dividends ssume it will be of credit will be redit. If surplus 2014 Forecast 2014 Adj