The management of Hearth and Home provides you with the following projections of net sales (in 000's) for the next three years: 2074 - 54,213; 2075 - $4,929; 2076 - $5,717. How would you characterize the assumptions used in making these projections? O Conservative - projected sales growth is significantly below historical levels O Conservative - sales are projected to be flat O Plausible-projected sales growth slows at the same rate as historical sales growth O Aggressive - projected sales growth is considerably above historical levels 20Y3 $ Sales Cost of goods sold Gross profit 3,570 2.467 1,103 20Y2 3.000 2.093 907 20Y1 2.500 1.773 727 1 33 36 Interest expense Depreciation expense Operating expense Profit before taxes 36 60 52 50 586 477 345 371 270 421 Taxes 188 149 108 Net profit after taxes $ 233 $ 196 $ 162 Dividends 95 84 65 Earnings retained 138 $ 112 $ 97 ne end of 20Y3, the company was a model customer, meeting the second-quarter 30-day p requirement fairly easily in 20Y1 and 20Y2. At the end of fiscal 20Y3, however, the ny was unable to clean up the line. In fact, at the end of June, the outstanding balance was 00, the company having been unable to reduce the line significantly below $100,000 at any uring the entire second quarter. The balance outstanding on the last day for which you have as $153,000 Holmgren is the lender responsible for the relationship, and he has asked you for assistance in ng how to handle the loan. the company could not meet the cleanup requirement, John waived the requirement based on ompany's past history and performance. In John's opinion, H and H's management has such integrity that your organization will be able to recover its money; he believes that the owners d sell their houses if necessary to repay the debt. Having said that, John is also aware that the ng family depends upon dividend income and considers an annual dividend of at least $80,000 mandatory. is feeling the dissatisfaction of credit management, which is unhappy with his decision to waive Clean-up. He needs to come up with a solution to the problem that will meet both the company's your organization's needs. ou and John discuss the situation, he tells you that H and H's management expects sales to part of that increase will be due to additional contracting - mainly repairing older installations by a couple of competitors that have since gone out of business. The Wilkinsons have proposed that the limit on the revolving credit be increased to $500,000. D e fs