Could you please help with calculating the EFN for 10, 15, and 40 percent growth rates. The most recent financial statements for Crosby, Incorporated, follow. Interest expense and short-term debt will remain constant; the tax rate and the dividend payout rate will also 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 2020 Income Statement Sales $ 754,000 Costs 610,000 Other expenses 24,500 Earnings before interest and taxes $ 119,500 Interest paid 10,400 Taxable income $ 109,100 Taxes (21%) 22,911 Net income $ 86,189 Dividends $ 42,540 Addition to retained earnings 43,649 CROSBY, INCORPORATED Balance Sheet as of December 31, 2020 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 24,340 Accounts payable $ 57,800 Accounts receivable 33,670 Notes payable 14,900 Inventory 70,610 Total $ 72,700 Total $ 128,620 Long-term debt $ 102,000 Owners’ equity Fixed assets Common stock and paid-in surplus $ 97,000 Net plant and equipment $ 211,000 Retained earnings 67,920 Total $ 164,920 Total assets $ 339,620 Total liabilities and owners’ equity $ 339,620 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 10, 15 and 40 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Could you please help with calculating the EFN for 10, 15, and 40 percent growth rates.

The most recent financial statements for Crosby, Incorporated, follow. Interest expense and short-term debt will remain constant; the tax rate and the dividend payout rate will also 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
2020 Income Statement
Sales		$ 754,000
Costs		610,000
Other expenses		24,500

Earnings before interest and taxes		$ 119,500
Interest paid		10,400

Taxable income		$ 109,100
Taxes (21%)		22,911

Net income		$ 86,189

Dividends	$ 42,540
Addition to retained earnings	43,649

CROSBY, INCORPORATED
Balance Sheet as of December 31, 2020
Assets		Liabilities and Owners’ Equity
Current assets		Current liabilities
Cash	$ 24,340	Accounts payable	$ 57,800
Accounts receivable	33,670	Notes payable	14,900

Inventory	70,610	Total	$ 72,700

Total	$ 128,620	Long-term debt	$ 102,000

		Owners’ equity
Fixed assets		Common stock and paid-in surplus	$ 97,000
Net plant and equipment	$ 211,000	Retained earnings	67,920

		Total	$ 164,920

Total assets	$ 339,620	Total liabilities and owners’ equity	$ 339,620

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 10, 15 and 40 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.)

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