only answer number 27&28
both begin 25. Calculating EFN [LO2] The most recent financial statements for Moose Tours, Inc., follow. Sales for 2009 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, and accounts payable increase I PART 2 Financial Statements and long term inancial Planning spontaneously with sales. If the firm is operating at full capacity and no new debt op equity is issued, what external financing is needed to support the 20 percent growth rute in sales? MOOSE TOURS, INC. 2008 Income Statement Sales Costs Other expenses Earnings $929,000 723,000 19.000 MOOSE TOURS, INC. 2008 Income Statement Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes Net income Dividends $33,735 Addition to retained earnings 78,715 $929,000 723,000 19,000 $187,000 14,000 $173,000 60,550 $112,450 17,000 MOOSE TOURS, INC. Balance Sheet as of December 31, 2008 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 25,300 Accounts payable $ 68,000 Accounts receivable 40,700 Notes payable Inventory 86,900 Total $ 85,000 Total $152,900 Long-term debt Fixed assets Owners' equity Net plant and equipment 413,000 Common stock and paid-in surplus $140,000 Retained earnings 182,900 Total $322,900 Total assets $565,900 Total liabilities and owners' equity $565,900 I $158,000 26. Capacity Usage and Growth [LO2] In the previous problem, suppose the firm was operating at only 80 percent capacity in 2008. What is EFN now? 27. Calculating EFN [LO2) In Problem 25, suppose the firm wishes to keep its debt- mu ratie constant. What is EFN now? 20. FEM and Internal Growth [LO2, 3] Redo Problem 25 using sales growth rates of 15 and 25 percent in addition to 20 percent. Illustrate graphically the relationship between EFN and the growth rate, and use this graph to determine the relationship between them. At what growth rate is the EFN equal to zero? Why is this internal growth rate different from that found by using the equation in the text? 25. Calculating EFN (LO2] The most recent financial statement! Inc., follow. Sales for 2009 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, and accounts payable increase PART 2 Financial Statements and long term financial Planning spontaneously with sales. If the firm is operating at full capacity and no new debtor equity is issued, what external financing is needed to support the 20 percent growth rate in sales
