In Problem 19, suppose the firm was operating at only 90 percent capacity in 2017. What is EFN now?

Data From Problem 19

The most recent financial statements for Moose Tours, Inc., follow. Sales for 2017 are projected to grow by 15 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued, what is the external financing needed to support the 15 percent growth rate in sales?

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MOOSE TOURS, INC. 2016 Income Statement $995,000 Sales Costs (782,000) Other expenses (15,000) $198,000 Earnings before interest and taxes Interest paid (21,670) $176,330 Taxable income Taxes (35%) (61,716) $114,615 Net income $45,700 Dividends Addition to retained earnings $68,915 MOOSE TOURS, INC. Balance Sheet as of December 31, 2016 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 27,500 Accounts payable $ 71,500 Accounts receivable 47,300 Notes payable 9,900 Inventory 83,600 Total $ 81,400 Total $158,400 Long-term debt $171,600 Fixed assets Owners' equity Net plant and Common stock and paid-in surplus $ 23,100 equipment $400,400 Retained earnings 282,700 Total $305,800 Total assets $558,800 Total liabilities and owners' equity $558,800