c$.$ If you are using the

between EFN and $1992$ capacity

$7.$ In general, what impacts do a firm's dividend policy, profitability, and capital intensity have on its financing requirements? $($Again$,$ if you are using the Lotus model, you could do a sensitivity analysis wherein you change certain input data and then observe the effect on EFN. It would be relatively easy to change the input data section to use a payout ratio rather than dividends per share in the event that management wanted to see the relationship between the payout and EFN. To change the profit margin, it would be necessary to change some of the income statement data. This would, of course, depart from the assumption that the $1993$ ratios will be the same as $1992$ ratios.$)$

$8.$ The percentage of sales method has been used to forecast the firm's financial statements. Suppose one of the senior executives asked you what assumptions are implied when one uses the percentage of sales method. That is$,$ under what circumstances would the percentage of sales method produce a valid, as opposed to an incorrect, forecast? How would you answer?

$9.$ What are some other methods that could be used to forecast the asset$-$and$-$liability balances and, thus, the forecasted financial requirements? If the senior executives asked you to incorporate these procedures into your analysis, how would you do it$,$ how long would it take, and what additional data would you require?

$10.$ The case states that Space$-$Age's optimal capital structure calls for $20$ percent long$-$term debt and $80$ percent common equity. However, according to the $1992$ balance sheet, the firm's capitalization ratio is Long$-$term debt$/$Total permanent capital $$17,490,000+11,310,000$ percent, and its total$-$debt$-$to$-$total$-$assets ratio is $$15,540,\frac{000}{\text{\$}}44,340,000=35\mathrm{.}1$ percent. Do these figures indicate that the capital structure is seriously out of balance, that the company is using far too much debt, and that you should modify the mix of debt and equity used in the forecasts? $($Hint: Think about whether the optimal capital structure should be stated in book value or market value terms.$)$