Question: Question 1 (10 points) Saved Your firm is considering purchasing a new machine. With the new machine, sales are expected to increase from $12 million

Question 1 (10 points) Saved Your firm is considering purchasing a

Question 1 (10 points) Saved Your firm is considering purchasing a new machine. With the new machine, sales are expected to increase from $12 million to $14 million. The firm believes assets and liabilities vary directly with sales. The firm's profit margin is 12% and the dividend payout ratio is 35%. The firm's current financial data is provided below. Current Assets Fixed Assets Total Assets ST Debt $3,500,000 6,250,000 $9,750,000 $1,250,000 5,000,000 2,500,000 1,000,000 $9,750,000 LT Debt Common Stock Retained Earnings Total Financing a. What is the firm's sustainable growth rate? b. Create a Pro Forma balance sheet and determine EFN

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