What percentage could revenues increase

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Question a. Assume that the company was operating at full capacity in 2014 with regard to all items except fixed assets (operating rooms and support space); fixed assets in 2014 were utilized to only 75 percent of capacity. By what percentage could 2015 revenues increase over 2014 revenues without the need for an increase in fixed assets?

Question b. Now suppose 2015 revenues increase by 25 percent over 2014 revenues. Use the constant growth method to develop a pro forma balance sheet and income statement. Assume that Gainesville cannot sell any fixed assets and that Gainesville cannot sell any fixed assets and that any financing required is borrowed as notes payable at an interest rate of 12 percent.

Reference no: EM132653416

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