You are comparing the current income statement of a firm to the pro forma income statement for next year. The pro forma is based on a four percent increase in sales. The firm is currently operating at 85 percent of capacity. Net working capital and all costs vary directly with sales. The tax rate and the dividend payout ratio are fixed. Given this information, which one of the following statements must be true?
1) The net working capital will increase by four percent next year.
2) The dividend payout ratio will increase next year.
3) The tax rate will decrease next year.
4) The firm's capacity utilization will increase next year.