The questions concerning incremental financial requirements must take into consideration the nature of the Executive Fruit operation. If it is a fruit grower presumably, the company facilities would have to be increased to increase production in order to support a 10% growth in unit sales. If Executive Fruit is a wholesaler or importer, a significant expansion of facilities would not be required, but working capital requirements would increase. Again, the nature of the operation would dictate the change in working capital that would be required. The two working capital items most subject to change would be inventory and accounts receivable. The dollar amount of increase would depend on the inventory turnover rate, and the terms offered to clients. In the case of a fruit wholesaler or importer, credit terms would likely be short and inventory turn over high. This would mean that working capital increments would be minimal relative to overall sales volume.
             Based on the material provided in the case, the required capital increment cannot be computed. There are no current debt and capital levels available. There is also no information provided on the firms earnings, profit margins, return on capital or capital retention rate. Without these, it is impossible to comment meaningfully on debt/equity ratios, present or projected, interest coverage, or even current interest expense. Without all this data, no comment can be made on the debt/equity ratios or interest coverage, present or projected.1
             Outsourcing could have impacts on either working capital or plant and equipment requirements. Again, this would depend on the nature of the operation, and what was outsourced. If Executive Fruit were a producer of fruit, there could be a reduction in the amount of capital required for production facilities (orchards, vines, etc.) if arrangements were made with other producers to supply pr
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