3. When forecasting, many assets can be forecast to increase as a percentage of sales. However, fixed assets often must be increased by forecasting specific amounts because it is impossible to buy part of a new plant or machine. In this case, a company has a staircase or lumpy fixed cost structure. Assume that East Coast Yachts is currently producing at 100 percent of capacity. As a result, to expand production, the company must set up an entirely new production line at a cost of $25 million. How would the financial forecast be impacted? What additional assumptions would be required? What would be the implications of those assumptions?

EAST COAST YACHTS Balance Sheet as of December 31,2022 EAST COAST YACHTS Balance Sheet as of December 31,2022