The most recent financial statements for Crosby, Incorporated, follow. Sales for 2022 are projected to grow by 20 percent. Interest expense 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. CROSBY, INCORPORATED 2021 Income Statement $ 686,530 Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes (21%) Net income Dividends Addition to retained earnings $27,475 56.265 554,420 14,020 $ 118.090 12,090 $106,000 22,260 $ 83,740 CROSBY, INCORPORATED Balance Sheet as of December 31, 2021 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts receivable $ 20,940 31,970 Accounts payable Notes payable $ 53,790 13,215 Inventory 71,320 Total Total $124,230 Long-term debt $ 67,005 $127,500 Owners' equity Fixed assets Net plant and equipment $341,980 Total assets Common stock and paid-in surplus Retained earnings Total $ 466.210 Total liabilities and owners' equity $ 105,000 166,705 $ 271,705 $466,210 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.) EFN
The most recent financial statements for Crosby, Incorporated, follow. Sales for 2022 are projected to grow by 20 percent. Interest expense 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. CROSBY, INCORPORATED 2021 Income Statement $ 686,530 Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes (21%) Net income Dividends Addition to retained earnings $27,475 56.265 554,420 14,020 $ 118.090 12,090 $106,000 22,260 $ 83,740 CROSBY, INCORPORATED Balance Sheet as of December 31, 2021 Assets Liabilities and Owners' Equity Current assets Current liabilities Cash Accounts receivable $ 20,940 31,970 Accounts payable Notes payable $ 53,790 13,215 Inventory 71,320 Total Total $124,230 Long-term debt $ 67,005 $127,500 Owners' equity Fixed assets Net plant and equipment $341,980 Total assets Common stock and paid-in surplus Retained earnings Total $ 466.210 Total liabilities and owners' equity $ 105,000 166,705 $ 271,705 $466,210 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.) EFN
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, follow. Sales for 2022 are
projected to grow by 20 percent. Interest expense 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.
CROSBY, INCORPORATED
2021 Income Statement
$ 686,530
Sales
Costs
Other expenses
Earnings before interest and taxes
Interest expense
Taxable income
Taxes (21%)
Net income
Dividends
Addition to retained earnings
$27,475
56.265
554,420
14,020
$ 118.090
12,090
$106,000
22,260
$ 83,740
CROSBY, INCORPORATED
Balance Sheet as of December 31, 2021
Assets
Liabilities and Owners' Equity
Current assets
Current liabilities
Cash
Accounts receivable
$ 20,940
31,970
Accounts payable
Notes payable
$ 53,790
13,215
Inventory
71,320
Total
Total
$124,230
Long-term debt
$ 67,005
$127,500
Owners' equity
Fixed assets
Net plant and equipment
$341,980
Total assets
Common stock and paid-in surplus
Retained earnings
Total
$ 466.210
Total liabilities and owners' equity
$ 105,000
166,705
$ 271,705
$466,210
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.)
EFN
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