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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
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
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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
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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