The below table summarizes the 2017 income statement and end-year balance sheet of Drakes Bowling Alleys. Drakes financial manager forecasts a 20% increase in sales and costs in 2018. The ratio of sales to average assets is expected to remain at 0.50. Interest is forecasted at 4% of debt at the start of the year.

a. What is the implied level of assets at the end of 2018? (Enter your answer in thousands.)

b. If the company pays out 40% of net income as dividends, how much cash will Drake need to raise in the capital markets in 2018? (Enter your answer in thousands.)

c. If Drake is unwilling to make an equity issue, what will be the debt ratio at the end of 2018? (Round your answer to 2 decimal places.)

Income Statement $1,300 average assets)a Sales Costs Interest Pretax profit Tax Net income of (50% 780 (60% of sales) 20 (4% of debt at start of year) $ 500 150 (30% of pretax profit) $ 350 a Assets at the end of 2016 were $2,500,000 b Debt at the end of 2016 was $510,000 Balance Sheet $2,700 Debt $ 750 1.950 Assets Equity $2,700 $2,700 Total