Use the following assumptions to answer the following questions: (1) Operating ratios remain unchanged. (2) Sales will grow by 11.1%, 8%, 5%, and 5% for the next 4 years. (3) The target weighted average cost of capital (WACC) is 10%. This is the No Change scenario because operations remain unchanged.

Hateld Medical Supply (Millions of Dollars, Except per Share Data) Balance Sheet, 12131I2019 Income Statement, Year Ending 2019 Cash 3 90 Sales 39.0003 Accounts receivable 1,260 Op costs (excl. dept.) 8,100.9 Inventories M Depreciation 360.0 Total CA $2,790 EBIT 3 540.0 Net fixed assets 3,600 Interest 144.0 Total assets E Pre-tax earnings 5 396.0 Taxes (25%) 99.0 Accts. pay. 8: accruals 81,620 Net income 3 297.0 Line of credit 0 Total CL 3 1,620 Additional Inrmation Long-term debt 1.800 Dividends S 100 Total liabilities 33,420 Additions to RE 3 197 Common stock 2.100 Common shares 50 Retained earnings 870 EPS S 5.94 Total common equity m DPS S 2.00 Total liab. & equity $6.390 Ending stock price $ 40.00 https://ebooks.cenreader.com/#!/reader/d835f8b1-00d9-4c3b-9aa8-86476d59e66b/page/76e51e8be3b40aaae44ec17fe723b4c9 10/15/21, 4:44 AM Ebooks - Webreader.io Selected Additional Data for 2019 Hatfield Industry Hatfield Industry (Op. costs)/Sales 90% 88% Profit margin (M) 3.30% 5.60% Depr./FA 10% 12% Return on assets (ROA) 4.6% 9.5% Cash/Sales 1% 1% Return on equity (ROE) 10.0% 15.1% Receivables/Sales 14% 11% Sales/Assets 1.41 1.69 Inventories/Sales 16% 15% Asset/Equity 2.15 1.59 Fixed assets/Sales 40% 32% Debt/TA 28.2% 16.9% (Acc. pay. & accr.)/Sales 18% 12% (Total liabilities)/(Total assets) 53.5% 37.3% Tax rate 25% 25% Times interest earned 3.8 11.7 Target WACC 10% 11% P/E ratio 6.7 16.0 Interest rate on debt 8% 7% OP ratio: NOPAT/Sales 4.5% 6.1% CR ratio: (Total op. capital)/Sales 53.0% 47.0% ROIC 8.5% 13.0%