(Use Chart Below)

At 90% capacity, what level will sales have to reach for the discretionary items to become spontaneous that is move-in direct proportion to sales?

*4,277,777

*4,235,000

*3,975,000

Compute the new level of net income for the company

*85,880

*80,220

*56,935

Compute the company's additional retained earnings for the year

*55,360

*61,420

*58,220

Compute the new level of total assets required

*1,779,800

*1,815,800

*1,272,680

Calculate the new level of current liabilities

*$502,358

*$568,357

*$571,720

Compute the company's new level of retained earnings on the balance sheet

$224,600

$277,666

$284,208

Calculate the level of Additional Funds Needed (AFN) to support the increase in sales.

$39,260

$37,354

$42,460

ASSETS
	2015	2014
CASH	$52,000	$57,600
ACCOUNTS RECEIVABLE	402,000	351,200
INVENTORIES	836,000	715,200
TOTAL CURRENT ASSETS	$1,290,000	$1,124,000
GROSS FIXED ASSETS	527,000	491,000
LESS: ACCUMULATED DEPRECIATION	-166,200	-146,200
NET FIXED ASSETS	$360,800	$344,800
TOTAL ASSETS	$1,650,800	$1,468,800
LIABILITIES AND EQUITY
ACCOUNTS PAYABLE	$175,200	$145,600
NOTES PAYABLE	225,000	200,000
ACCRUALS	140,000	136,000
TOTAL CURRENT LIABILITIES	$540,200	$481,600
LONGTERM DEBT	424,612	323,432
COMMON STOCK	460,000	460,000
RETAINED EARNINGS	225,988	203,768
TOTAL EQUITY	$685,988	$663,768
TOTAL LIABILITIES AND EQUITY	$1,650,800	$1,468,800
INCOME STATEMENTS
	2015	2014
SALES	$3,850,000	$3,432,000
COST OF GOODS SOLD	-3,250,000	-2,864,000
GROSS PROFIT	600,000	568,000
OTHER EXPENSES	-430,300	-340,000
DEPRECIATION	-20,000	-18,900
EBIT	$149,700	$209,100
INTEREST EXPENSE	-76,000	-62,500
EBT	$73,700	$146,600
TAXES (40%)	-29,480	-58,640
NET INCOME	$44,220	$87,960
EPS	$0.44	$0.88