Part C: Break-Even Decisions Return all assumptions to their initial (Part A) values, including returning sales growth back to the average of the previous two years, and returning SG&A/Sales and PPE/Sales back to the average of the previous 3 years. (The Undo button can do this quickly.) Assume now that New England Corp. has determined that they cannot exceed $100 million in long-term debt. So they are looking for other ways to remedy the shortfall in financing. Determine what changes they would have to make under the following options:

Q7: What if they opt to remedy the shortfall by reducing sales growth? What is the highest growth rate they could achieve and not exceed the debt limit? _________________

Q8: Return sales growth to its initial level (average of previous 2 years). Now suppose that they want to remedy the shortfall by cutting the dividend payout ratio. Will this get them under the debt ceiling? _________________

Q9: Return the dividend payout rate to its initial level (average of previous 3 years). Now suppose that they want to remedy the shortfall by using fixed assets more efficiently (i.e., by cutting PPE/Sales). Use Solver to find what PPE/Sales would have to be reduced to in order to stay under the debt ceiling. _________________