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. CROSBY, INCORPORATED 2021 Income Statement Sales $ 761,000 Costs 617,000 Other expenses 28,000 Earnings before interest and taxes $116,000 Interest expense 13,200 Taxable income $ 102,800 Taxes (23%) 23,644 Net income $ 79,156 Dividends $ 27,640 Addition to retained earnings 51, 516 CROSBY, INCORPORATED Balance Sheet as of December 31, 2021 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 25, 040 Accounts payable $ 60, 600 Accounts receivable 34,440 Notes payable 17,000 Inventory 71,240 Total $ 77,600 Total $ 130, 720 Long-term debt $ 109,000 Owners' equity Fixed assets Common stock and paid - in surplus $ 108,000 Net plant and equipment $ 218,000 Retained earnings 54, 120 Total $ 162, 120 Total assets $ 348,720 Total liabilities and owners' equity $ 348, 720 What is the EFN if the firm wishes to keep its debt - equity ratio constant? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g ., 32.)
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. CROSBY, INCORPORATED 2021 Income Statement Sales $ 761,000 Costs 617,000 Other expenses 28,000 Earnings before interest and taxes $116,000 Interest expense 13,200 Taxable income $ 102,800 Taxes (23%) 23,644 Net income $ 79,156 Dividends $ 27,640 Addition to retained earnings 51, 516 CROSBY, INCORPORATED Balance Sheet as of December 31, 2021 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash $ 25, 040 Accounts payable $ 60, 600 Accounts receivable 34,440 Notes payable 17,000 Inventory 71,240 Total $ 77,600 Total $ 130, 720 Long-term debt $ 109,000 Owners' equity Fixed assets Common stock and paid - in surplus $ 108,000 Net plant and equipment $ 218,000 Retained earnings 54, 120 Total $ 162, 120 Total assets $ 348,720 Total liabilities and owners' equity $ 348, 720 What is the EFN if the firm wishes to keep its debt - equity ratio constant? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g ., 32.)
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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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. CROSBY,
INCORPORATED 2021 Income Statement Sales $
761,000 Costs 617,000 Other expenses 28,000
Earnings before interest and taxes $116,000 Interest
expense 13, 200 Taxable income $ 102,800 Taxes
(23%) 23,644 Net income $ 79, 156 Dividends $ 27,640
Addition to retained earnings 51, 516 CROSBY,
INCORPORATED Balance Sheet as of December
31, 2021 Assets Liabilities and Owners' Equity Current
assets Current liabilities Cash $ 25, 040 Accounts
payable $ 60, 600 Accounts receivable 34, 440 Notes
payable 17,000 Inventory 71, 240 Total $ 77,600 Total $
130, 720 Long-term debt $ 109,000 Owners' equity
Fixed assets Common stock and paid - in surplus $
108,000 Net plant and equipment $ 218,000 Retained
earnings 54, 120 Total $ 162, 120 Total assets $ 348, 720
Total liabilities and owners' equity $ 348,720 What is
the EFN if the firm wishes to keep its debt-equity ratio
constant? (Do not round intermediate calculations and
round your answer to the nearest whole number, e.g
., 32.)
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