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The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, Costs include interest. Assume that Eagle's assets are proportional
The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 35% in revenue, expenses, and assets in 2023. The tax rate will remain constant. Sales Costs Income Statement $ 4,750 2,150 Pretax income Taxes (at 40.0%) $ 2,600 1,040 Net income $ 1,560 Balance Sheet, Year-End 2022 2021 2022 2021 Net assets $ 6,800 $ 6,500 Total $ 6,800 $ 6,500 Debt Equity Total $ 2,900 3,900 $ 2,800 3,700 $ 6,800 $ 6,500 a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Internal growth rate b. Sustainable growth rate % %
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