1. Using the financial statements for 2009 as your 'base', assume that Luxio's sales are 20% higher for 2010 . Use this projection to prepare the pro forma statements following the requirements listed below. Assume the change in sales is permanent. 2. For the Income Statement: - Cost of Goods Sold rate is expected to remain constant; - 'Depreciation' and 'Interest paid' expenses are expected not to change; - The Tax rate is expected to decrease to 32%; and - Management is expected to increase the amount of dividends paid by 5% (therefore, the Dividend payout rate will increase by 5% ). 3. For the Balance Sheet: - 'Current assets' change in direct proportion to sales; - 'Fixed assets' are being operated at 100% of capacity; - 'Accounts payable' changes in direct proportion to sales; - 'Notes payable' and 'Other' current liabilities do not change; - 'Common stock' remains unchanged; and - Use 'Long-term debt' as the plug variable. 4. Determine the amount of External Financing Needed (EFN) under the pro forma assumptions. Detail how this external financing is distributed. LUXIO GOLF CORP. 2009 Income Statement Balmnee Shert LUXIO GOLF CORP