A. What is R&E's projected external financing required in 2016? How does this number compare to the 2015 projection?

B. Perform a sensitivity analysis on this projection. How does R&E's projected external financing required change if the ration of cost of goods sold to net sales declines from 86.0 percent to 84.0 percent?

C. Perform a scnario analysis on this projection. How does R&E's projected external financing required change if a severe recession occurs in 2016? Assume net sales decline 5 percent, cost of goods sold rises to 88 percent of net sales due to price cutting, and current assets increase to 35 percent of net sales as management fails to cut purchases promptly in response to declining sales.

Chapter 3 Problem 7
Note: Manual calculation mode is on. You must press F9 key to calculate.
Facts and Assumptions
Year	2014	2015	2016
Net sales	$20,613
Growth rate in sales		25%	30%
Cost of goods sold/net sales		86%	86%
Gen., sell,, and admin. expenses/net sales		12%	11%
Long-term debt	$ 760	$ 660	$ 560
Current portion long-term debt	$ 100	$ 100	$ 100
Interest rate		10%	10%
Tax rate		45%	45%
Dividend/earnings after tax		50%	50%
Current assets/net sales		29%	29%
Net fixed assets		$ 280	$ 270
Current liabilities/net sales		14.5%	14.4%
Owners' equity	$ 1,730
INCOME STATEMENT
Year	2014	Forecast 2015	2016
Net sales		$ 25,766
Cost of good sold		22,159
Gross profit		3,607
Gen., sell,, and admin. exp.		3,092
Interest expense		231
Earnings before tax		285
Tax		128
Earnings after tax		156
Dividends paid		78
Additions to retained earnings		78
BALANCE SHEET
Current assets		$ 7,472
Net fixed assets		280
Total assets		7,752
Current liabilities		3,736
Long-term debt		660
Equity		1,808
Total liabilities and shareholders' equity		6,204
EXTERNAL FUNDING REQUIRED		$ External funding 1,548 R&E Supplies Assumptions for 2016 ($thousands) Growth rate in net sales 30% Cost of goods sold/net sales 86% Gen, sell, admin, expenses/net sales 11% Long term debt $560 Curremt portion long-tern debt $100 Interest rate 10% Tax rate 45% Dividend/ earnings after tax 50% current assets/net sales 29% net fixed assets $270 Current liabilities/net sales 14.4% Please help me with this problem as soon as possible.