In Problem 24, suppose the firm was operating at only 80 percent capacity in 2020. What is EFN now?

Problem 24

The most recent financial statements for Crosby, Inc., follow. Sales for 2021 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed 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 external financing is needed to support the 20 percent growth rate in sales?

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CROSBY, INC. 2020 Income Statement Sales $686,530 Costs 554,420 Other expenses 14,020 Earnings before interest and taxes $118,090 Interest paid 12,090 Taxable income $106,000 Taxes (21%) 22,260 Net income $ 83,740 Dividends $27,475 Addition to retained earnings 56,265