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1 Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. INCOME STATEMENT, 2019 Costs Sales Interest Taxes

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1 Eagle Sports Supply has the following financial statements. Assume that Eagle's assets are proportional to its sales. INCOME STATEMENT, 2019 Costs Sales Interest Taxes Net income $1,750 340 80 290 $1,040 2018 5,700 Assets $ BALANCE SHEET, YEAR-END 2019 $ 6,000 Debt Equity $6,000 Total 2018 $ 1,900 3,800 35, 700 2019 $ 2,000 4.000 $ 6,000 Total $ 6,700 a. What is the internal growth rate of Eagle Sports if the dividend payout ratio is fixed at 70% and the equity-to-asset ratio is fixed at 2/3? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete and correct. Internal growth rate 5.49 b. What is the sustainable growth rate? (Do not round Intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Sustainable growth rate 8.45 %

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