Question: All historical information remains the same ( through Year X - 1 ) . Use this new set of assumptions: Revenue growth: 3 0 %

Allhistorical information remains the same (through Year X-1).
Usethis new set of assumptions:
Revenue growth:
30% YearXE
30% Year X+1E
1% improvement in Gross Margin for Year X E (from yearX-1).No further change in the GrossMargin for Year X+1.
1% improvement in Sellingin Year XE.Same level in Year X+1E.
G&A remains constanton a common size basis.
$10,000 increase in R&D in X E.
Same R&D level in Year X+1 E.
BasicShares outstanding 3,000,000.
A new section of the existing plant isconstructed for $300,000.This newconstruction is depreciated over 30 years using the straight line method.All other depreciation remains the same forthe years X E and X+1 E.
The plant is financed with a $300,00010 year bondwith a fixed interest payment of 10% annually.
The Company, for the first time, grants 500,000 options to variousmembers ofmanagement with an exercise price of $1.00. These options aregranted on the first day of Year X E.
There are no other options, warrants or convertible securities.
The average stock price for Year X E and YearX+1 E is projected to be $5.00.
Allother interest payments, interest income and tax rates remain the same.
 Allhistorical information remains the same (through Year X-1). Usethis new set

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