The following information is available for a company. Set up the income statement and balance sheet for 2007, then forecast the income statement and balance sheet for 2008, assuming sales grow by 15% During 2008 the company is going to buy a $300,000 machine, depreciated SL over 6 years. It will do its financing for next year using bonds that have a coupon rate of 8%. It pays $100,000 a year on its long term debt. 2007 2008 Additional Financing Necessary Dividends (30% payout) Taxable income Depreciation Cash Accruals Raw material Curr Assets $50,000 $175,000 $50,000 $400,000 $50,000 $175,000 $50,000 $400,000 $600,000 $312,500 $475,000 $100,000 $50,000 Taxable income Depreciation Cash Accruals Raw material Curr. Assets LTD at 10% Labor Accum. Depr. ST portion of LTD A/P TL & NW Operating Costs AIR Curr. Liab. GEA Sales Total Assets CS Interest Contri. To RE COGS NEA EBIT Other Fixed Costs Taxes (40%) Gross Profits RE Inv. $125,000 $275,000 $1,550,000 $1,250,000 $480,000 $76,000 $55,000 $425,000 $255,000 $125,000 $275,000 $1,550,000 $1,250,000 $480,000 $76,000 TL & NW Operating Costs AR Curr. Liab. GFA Sales Total Assets CS Interest Contri. To RE COGS NEA EBIT Other Fixed Costs Taxes (40%) Gross Profits RE Inv. N/P at 8% After Tax Income $55,000 $425,000 $255,000 $75,000