Question
69,183 is not the correct answer The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 30 percent.
69,183 is not the correct answer
The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 30 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. |
CROSBY, INC. 2017 Income Statement | ||||||
Sales | $ | 771,000 | ||||
Costs | 627,000 | |||||
Other expenses | 33,000 | |||||
Earnings before interest and taxes | $ | 111,000 | ||||
Interest paid | 17,200 | |||||
Taxable income | $ | 93,800 | ||||
Taxes (23%) | 21,574 | |||||
Net income | $ | 72,226 | ||||
Dividends | $ | 20,640 | ||||
Addition to retained earnings | 51,586 | |||||
CROSBY, INC. Balance Sheet as of December 31, 2017 | |||||||
Assets | Liabilities and Owners Equity | ||||||
Current assets | Current liabilities | ||||||
Cash | $ | 26,040 | Accounts payable | $ | 64,600 | ||
Accounts receivable | 35,540 | Notes payable | 20,000 | ||||
Inventory | 72,140 | Total | $ | 84,600 | |||
Total | $ | 133,720 | Long-term debt | $ | 119,000 | ||
Owners equity | |||||||
Fixed assets | Common stock and paid-in surplus | $ | 118,000 | ||||
Net plant and equipment | $ | 228,000 | Retained earnings | 40,120 | |||
Total | $ | 158,120 | |||||
Total assets | $ | 361,720 | Total liabilities and owners equity | $ | 361,720 | ||
What is the EFN if the firm wishes to keep its debt-equity ratio constant? (Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.) |
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