The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing,...

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The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $200,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $68,000 and variable costs at 80% of revenue. The company's policy is to pay out two- thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2022 (Figures in $ thousands) Revenue Fixed costs Variable costs (80% of revenue) Depreciation Interest (8% of beginning-of-year debt) $ 1,800 68 1,440 80 24 Taxable income Taxes (at 40%) Net income Dividends 188 75 $ 113 $ 75 Addition to retained earnings $ 38 BALANCE SHEET, YEAR-END (Figures in $ thousands) Assets Net working capital Fixed assets Total assets 2022 $ 400 800 $ 1,200 Liabilities and shareholders' equity Debt Equity Total liabilities and shareholders' equity $ 300 900 $ 1,200 Required: a1. Produce an income statement for 2023. Assume that net working capital will equal 50% of fixed assets. a2. Produce a balance sheet for 2023. Assume that net working capital will equal 50% of fixed assets. b. Now assume that the balancing item is debt and that no equity is to be issued. Prepare a completed pro forma balance sheet for 2023. c. Assume that the balancing item is debt and that no equity is to be issued, what is the projected debt ratio for 2025? d. Suppose that the cost of equity is 10% and that at the end of 2025 Dynastatics shares are expected to sell at 12 times net income. What would be the value today of the firm's equity? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Produce an income statement for 2023. Assume that net working capital will equal 50% of fixed assets. Note: Input all amounts as positive values. Enter your answers in thousands. Round intermediate calculations and final answers to the nearest whole dollar amount. Pro-Forma Income Statement 2023 Revenue $ 2,250 Fixed costs Variable costs 68 1,800 Depreciation 80 Interest 24 Taxable income 278 Taxes 111 Net income $ 167 Dividends $ 112 Retained earnings $ 55 Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Produce a balance sheet for 2023. Assume that net working capital will equal 50% of fixed assets. Note: Enter your answers in thousands. Balance Sheet Year-End 2023 Assets Net working capital Fixed assets Total assets $ 500 1,000 1,500 Liabilities and shareholders' equity Debt $ 300 Equity 1,200 Total liabilities and shareholders' equity $ 1,500 Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Now assume that the balancing item is debt and that no equity is to be issued. Prepare a completed pro forma balance sheet for 2023. Note: Enter your answers in thousands. Round intermediate calculations and final answers to the nearest whole dollar amount. Balance Sheet Year-End 2023 Assets Net working capital $ 500 Fixed assets 1,000 Total assets $ 1,500 Liabilities & Shareholders' Equity Debt $ 545 Equity 956 Total liabilities & shareholders' equity $ 1,500 Show less Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Assume that the balancing item is debt and that no equity is to be issued, what is the projected debt ratio for 2025? Note: Do not round your intermediate calculations. Round your answer to 3 decimal places. Debt ratio 0.363 Req A1 Req A2 Req B Reg C Req D Req A2 Suppose that the cost of equity is 10% and that at the end of 2025 Dynastatics shares are expected to sell at 12 times net income. What would be the value today of the firm's equity? Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Enter your answers in thousands. Debt Ratio = 0.25 No Equity Firm Value Show less The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $200,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50. Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $68,000 and variable costs at 80% of revenue. The company's policy is to pay out two- thirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. INCOME STATEMENT, 2022 (Figures in $ thousands) Revenue Fixed costs Variable costs (80% of revenue) Depreciation Interest (8% of beginning-of-year debt) $ 1,800 68 1,440 80 24 Taxable income Taxes (at 40%) Net income Dividends 188 75 $ 113 $ 75 Addition to retained earnings $ 38 BALANCE SHEET, YEAR-END (Figures in $ thousands) Assets Net working capital Fixed assets Total assets 2022 $ 400 800 $ 1,200 Liabilities and shareholders' equity Debt Equity Total liabilities and shareholders' equity $ 300 900 $ 1,200 Required: a1. Produce an income statement for 2023. Assume that net working capital will equal 50% of fixed assets. a2. Produce a balance sheet for 2023. Assume that net working capital will equal 50% of fixed assets. b. Now assume that the balancing item is debt and that no equity is to be issued. Prepare a completed pro forma balance sheet for 2023. c. Assume that the balancing item is debt and that no equity is to be issued, what is the projected debt ratio for 2025? d. Suppose that the cost of equity is 10% and that at the end of 2025 Dynastatics shares are expected to sell at 12 times net income. What would be the value today of the firm's equity? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Produce an income statement for 2023. Assume that net working capital will equal 50% of fixed assets. Note: Input all amounts as positive values. Enter your answers in thousands. Round intermediate calculations and final answers to the nearest whole dollar amount. Pro-Forma Income Statement 2023 Revenue $ 2,250 Fixed costs Variable costs 68 1,800 Depreciation 80 Interest 24 Taxable income 278 Taxes 111 Net income $ 167 Dividends $ 112 Retained earnings $ 55 Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Produce a balance sheet for 2023. Assume that net working capital will equal 50% of fixed assets. Note: Enter your answers in thousands. Balance Sheet Year-End 2023 Assets Net working capital Fixed assets Total assets $ 500 1,000 1,500 Liabilities and shareholders' equity Debt $ 300 Equity 1,200 Total liabilities and shareholders' equity $ 1,500 Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Now assume that the balancing item is debt and that no equity is to be issued. Prepare a completed pro forma balance sheet for 2023. Note: Enter your answers in thousands. Round intermediate calculations and final answers to the nearest whole dollar amount. Balance Sheet Year-End 2023 Assets Net working capital $ 500 Fixed assets 1,000 Total assets $ 1,500 Liabilities & Shareholders' Equity Debt $ 545 Equity 956 Total liabilities & shareholders' equity $ 1,500 Show less Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Req D Assume that the balancing item is debt and that no equity is to be issued, what is the projected debt ratio for 2025? Note: Do not round your intermediate calculations. Round your answer to 3 decimal places. Debt ratio 0.363 Req A1 Req A2 Req B Reg C Req D Req A2 Suppose that the cost of equity is 10% and that at the end of 2025 Dynastatics shares are expected to sell at 12 times net income. What would be the value today of the firm's equity? Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Enter your answers in thousands. Debt Ratio = 0.25 No Equity Firm Value Show less