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Use the percent of sales method and the following assumptions: ( 1 ) Sales in FY 2 0 1 9 will be $ 7 6
Use the percent of sales method and the following assumptions: Sales in FY will be $;
The tax rate will be ; Each item that changes with sales will be the fiveyear average percentage of sales; Property, Plant & Equipment Gross will increase to $; and The dividend will be $ per share. Use your judgment on all other items.
a What is the DFN in Is this a surplus or deficit?
b Assume that the DFN will be absorbed by longterm debt and that the interest rate is of LTD Set up an iterative worksheet to eliminate it
c Create a chart of cash vs sales and add a trend line. Is cash a consistent percentage of sales? Does this fit your expectations?
d Use the regression tool to verify your results from part c Is the trend statistically significant? Use at least three methods from the ression output to show why or why not.
e
Turn off iteration, and use the Scenario Manager to set up three scenarios:
Best CaseSales are higher than expected.
Base Case Sales are exactly as expected.
Worst CaseSales are less than expected.
What is the DFN under each scenario?
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