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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 to
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 2020. The tax rate will remain constant. Income Statement Sales $3,550 Costs 1,550 Pretax income $2,000 Taxes (at 30.0%) 600 Net income $1,400 2019 Net assets Balance Sheet, Year-End 2018 $ 5,600 $ 5,300 Debt Equity $ 5,600 $5,300 Total 2019 $ 2,300 3,300 $ 5,600 2018 $ 2,200 3,100 $5,300 Total a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed. What is the internal growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Internal growth rate 1% b. What is the sustainable growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Sustainable growth rate % 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 2020. The tax rate will remain constant. Income Statement Sales $3,550 Costs 1,550 Pretax income $2,000 Taxes (at 30.0%) 600 Net income $1,400 2019 Net assets Balance Sheet, Year-End 2018 $ 5,600 $ 5,300 Debt Equity $ 5,600 $5,300 Total 2019 $ 2,300 3,300 $ 5,600 2018 $ 2,200 3,100 $5,300 Total a. Assume that the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed. What is the internal growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Internal growth rate 1% b. What is the sustainable growth rate for 2020? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Sustainable growth rate %
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