Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The most recent financial statements for Crosby, Incorporated, appear below. Interest expense will remain constant; the tax rate and the dividend payout rate also will

The most recent financial statements for Crosby, Incorporated, appear below. Interest expense will remain constant; the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Assume the firm is operating at full capacity and the debt-equity ratio is held constant.
CROSBY, INCORPORATED
2021 Income Statement
Sales $ 767,000
Costs 623,000
Other expenses 31,000
Earnings before interest and taxes $ 113,000
Interest expense 15,600
Taxable income $ 97,400
Taxes (24%)23,376
Net income $ 74,024
Dividends $ 34,740
Addition to retained earnings 39,284
CROSBY, INCORPORATED
Balance Sheet as of December 31,2021
Assets Liabilities and Owners Equity
Current assets Current liabilities
Cash $ 25,640 Accounts payable $ 63,000
Accounts receivable 35,100 Notes payable 18,800
Inventory 71,780 Total $ 81,800
Total $ 132,520 Long-term debt $ 115,000
Owners equity
Fixed assets Common stock and paid-in surplus $ 110,000
Net plant and equipment $ 224,000 Retained earnings 49,720
Total $ 159,720
Total assets $ 356,520 Total liabilities and owners equity $ 356,520
Complete the pro forma income statements below. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g.,32.)
Calculate the EFN for 15,20 and 45 percent growth rates. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole number, e.g.,32.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Financial Modeling

Authors: Jack Avon

1st Edition

1430262052, 978-1430262053

More Books

Students also viewed these Finance questions

Question

What is meant by 'Wealth Maximization ' ?

Answered: 1 week ago

Question

e. What do you know about your ethnic background?

Answered: 1 week ago

Question

b. Why were these values considered important?

Answered: 1 week ago