Do you recommend either plan 1 or plan 2 for Grace & Bell Company and why? Address the impact of growth on future performance. Is the maximum growth possible always the best?

Current Plan 1 Plan 2 BALANCE Assets Total current assets Net fixed assets Total assets 500 500 1000 300 700 1000 700 700 1400 100 140 Liabilities and equity Acct pay & accrued liab Note payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and 100 200 100 500 200 1000 125 190 315 190 500 245 1250 100 280 395 500 225 1400 Current Plan 1 Plan 2 INCOME STATEMENTS Sales EBIT Interest EBT Net Income 2000 100 16 84 50.41 2500 125 16 109 65.4 2800 1401 79.36 60.64 36.384 Dividends (30%) Addition to Rd Free cash flow 15.12 35.28 $60 19.62 45.78 ($150) 10.92 25.47 ($286) Ratios Profit margin Return on Equity Debt/Assets Times interest earned Current 0.025 0.072 0.2 6.25 Plan 1 0.026 0.088 0.38 7.811 Plan 2 0.013 0.05 0.354 1.7641 Industry 0.04 0.156 0.36 9.4