1. The Excel Sheet Gilbert Lumber shows select financials for Gilbert Lumber, Inc. for the year ending 2017. The firms CEO, Mr. Gilbert, is expecting sales to grow by 21% next year. Long-term debt has been stable at $400,000 for the past 2 years. Interest rate on debt is 10%. Interest expense in year t is calculated based on debt balance outstanding at the beginning of year t, i.e. at the end of year t-1.

Assuming total assets and current liabilities increase proportional to sales in 2018:

1. How much external financing will Mr. Gilbert need in 2018 in order to support 21% higher sales growth? Clearly state any additional assumptions you must make in coming up with your estimate.
2. How would your answer change if Gilbert Lumber is operating at 85% utilization rate in 2017?