re projected to grow by 25 percent. Interest expense will remain constant; t id the dividend payout rate also will remain constant. Costs, other exp assets, fixed assets, and accounts payable increase spontaneously with sal expenses CROSBY, INCORPORATED 2021 Income Statement nas before interest and taxon $ 748,000 583,000 19,000 $146.000
re projected to grow by 25 percent. Interest expense will remain constant; t id the dividend payout rate also will remain constant. Costs, other exp assets, fixed assets, and accounts payable increase spontaneously with sal expenses CROSBY, INCORPORATED 2021 Income Statement nas before interest and taxon $ 748,000 583,000 19,000 $146.000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
ff1
Transcribed Image Text:The most recent financial statements for Crosby, Incorporated, appear below. Sales for
2022 are projected to grow by 25 percent. 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.
Sales
Costs
Other expenses
Earnings before interest and taxes
Interest expense
Taxable income
Taxes (25%)
Net income
CROSBY, INCORPORATED
2021 Income Statement
Dividends
Addition to retained earnings
Current assets
Cash
Accounts receivable
Inventory
Total
Fixed assets
Net plant and equipment
Total assets
EFN
$ 29,475
68,775
$ 20,740
43,680
92,960
$ 157,380
$ 424,000
CROSBY, INCORPORATED
Balance Sheet as of December 31, 2021
Assets
581,380
$ 748,000
583,000
19,000
$ 146,000
15,000
Answer is complete but not entirely correct.
$ 45,651
$ 131,000
32,750
$ 98,250
Liabilities and Owners' Equity
Current liabilities
Accounts payable
Notes payable
Total
Long-term debt
Owners' equity
Common stock and paid-in surplus
Retained earnings
If the firm is operating at full capacity and no new debt or equity is issued, what external
financing is needed to support the 25 percent growth rate in sales? (Do not round
intermediate calculations and round your answer to the nearest whole number, e.g.,
32.)
Total
Total liabilities and owners' equity
$ 54,900
14,100
$ 69,000
$ 131,000
$ 115,000
266,380
$ 381,380
$ 581,380
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