The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now

plans to expand and will increase net fixed assets $($i$.$e$.,$ assets net of depreciation$)$ by $$200,000$ per year for the next $5$ years, and it

forecasts that the ratio of revenues to total assets will remain at $1\mathrm{.}50.$ Annual depreciation is $10\%$ of net fixed assets at the beginning of

the year. Fixed costs are expected to remain at $$88,000$ and variable costs at $80\%$ of revenue. The company's policy is to pay out two$-$

thirds of net income as dividends and to maintain a book debt ratio of $20\%$ of total capital.

References

Required:

a$1.$ Produce an income statement for $2023.$ Assume that net working capital will equal $50\%$ of fixed assets.

a$2.$ Produce a balance sheet for $2023.$ Assume that net working capital will equal $50\%$ of fixed assets.

b$.$ Now assume that the balancing item is debt and that no equity is to be issued. Prepare a completed pro forma balance sheet for

c$.$ Assume that the balancing item is debt and that no equity is to be issued, what is the projected debt ratio for $2025?$

d$.$ Suppose that the cost of equity is $10\%$ and that at the end of $2025$ Dynastatics shares are expected to sell at $12$ times net income.

What would be the value today of the firm's equity?

Complete this question by entering your answers in the tabs below.

Req A$1$

Req A$2$

Req B

Req C

Req D

Produce an income statement for $2023.$ Assume that net working capital will equal $50\%$ of fixed assets.

Note: Input all amounts as positive values. Enter your answers in thousands. Round intermediate calculations and final

answers to the nearest whole dollar amount.