Using the following information, answer the questions below. MoonStar expects its sales increase by 9% for 2020. Depreciation expense, Interest expense and dividend payout amount will remain constant; the tax rate will also remain constant. Cost of goods sold, current assets, and accounts payable increase with sales, the firm is operating at its 75% capacity and no new debt or equity is issued.

MoonStar, Inc.

Income Statement ($ in millions)

2019 2020

(A) Calculate the firms full capacity sales.

(B) Calculate External Financing Needed (EFN) using forecasted income statements and balance sheet (You may copy income statement and balance sheet to the answer space below and estimate the numbers for 2020) .

13 points Save Answer (13 points) Using the following information, answer the questions below. MoonStar expects its sales increase by 9% for 2020. Depreciation expense, Interest expense and dividend payout amount will remain constant; the tax rate will also remain constant Cost of goods sold, current assets, and accounts payable increase with sales, the tim is operating at its 75% capacity and no new debt or equity is issued. MoonStar, Inc. Income Statement (S in millions) 2019 2020 $1.000.0 Net sales $3500 Less: Cost of goods sold $120.0 Less: Depreciation expense 590.0 Less: Other expenses S440.0 Earnings before interest and taxes S100.0 Less: Interest paid S340.0 Taxable Income S136.0 Less: Taxes (40%) S2040 Net income $28. Dividends $175.2 Additions to Retained Earnings MoonStar, Inc. 2018 and 2019 Balance Sheets ($ in millions) 2019 2020 20191 2020 Cash 50.0 Accounts payable 137. Accounts rec. 2450 Notes payable 55.0 Inventory 315.0 Total 192.8 Total 610.0 Long term debt 767.0 Net fixed assets 1300.0 Common stock 665.0 Retained earnings 285.2 Total assets 1 1910.0 Total liab.& equity 1910.0 (A) Calculate the firm's full capacity sales, (B) Calculate External Financing Needed (EFN) using forecasted income statements and balance sheet (You may copy income statement and balance sheet to the answer space below and estimate the numbers for 2020). ( 13 points Save Answer (13 points) Using the following information, answer the questions below. MoonStar expects its sales increase by 9% for 2020. Depreciation expense, Interest expense and dividend payout amount will remain constant; the tax rate will also remain constant Cost of goods sold, current assets, and accounts payable increase with sales, the tim is operating at its 75% capacity and no new debt or equity is issued. MoonStar, Inc. Income Statement (S in millions) 2019 2020 $1.000.0 Net sales $3500 Less: Cost of goods sold $120.0 Less: Depreciation expense 590.0 Less: Other expenses S440.0 Earnings before interest and taxes S100.0 Less: Interest paid S340.0 Taxable Income S136.0 Less: Taxes (40%) S2040 Net income $28. Dividends $175.2 Additions to Retained Earnings MoonStar, Inc. 2018 and 2019 Balance Sheets ($ in millions) 2019 2020 20191 2020 Cash 50.0 Accounts payable 137. Accounts rec. 2450 Notes payable 55.0 Inventory 315.0 Total 192.8 Total 610.0 Long term debt 767.0 Net fixed assets 1300.0 Common stock 665.0 Retained earnings 285.2 Total assets 1 1910.0 Total liab.& equity 1910.0 (A) Calculate the firm's full capacity sales, (B) Calculate External Financing Needed (EFN) using forecasted income statements and balance sheet (You may copy income statement and balance sheet to the answer space below and estimate the numbers for 2020). (