h3 (Sections 3.4-3.6) Problem 3-23 Calculating EFN The most recent financial statements for Retro Machine, Inc, follow. Sales for 2017 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. RETRO MACHINE, INC. 2016 Income Statement $754,000 589,000 10,000 Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxe s (30%) Net income Dividends Addition to retained $155,000 11,000 144,000 43,200 $100,800 $20,160 80,640 RETRO MACHINE, INC. Balance Sheet as of December 31, 2016 AssetS Liabilities and owners' Equity Current assets Current liabilities Accounts payable Cash Accounts receivable Inventory s 21,340 33, 660 70,620 55,500 14,700 S 70,200 $137, 000 Notes payable Total Total $125, 620 Long-term debt owners' equity Common stock and paid-in surplus Fixed assets $123, 000 Net plant and equipment 430,000 Accumulated retained earnings 225, 420 $348,420 Total liabilities and owners' s555, 620 Total Total assets S555, 620 equityY The firm wishes to keep its debt-equity ratio constant. Construct the pro forma income statement and balance sheet. Be sure to include the new long-term debt raised to maintain the debt-equity ratio in your pro forma balance sheet. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g. 32.) Pro Forma Income Statement Sales Costs Other expenses EBIT Interest Taxable income Taxes (30%) Net income 904800 12000 186000 122500 Pro Forma Balance Sheet Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts receivable Inventory 25608 40392 84744 50744 Long-term debt Accounts payable Notes payable Total 8130 Total Owners equity Fixed assets Common atock and paid-in surplus 12 Net plant and equipment $516000 ccumulated retained earnings Total 4642 Total liabilities and owners' equity Total assets What is the EFN? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g , 32)