Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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25. Calculating EFN [LO2] The most recent financial statements for Moose Tours,
Inc., follow. Sales for 2009 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, and accounts payable increase
PART 2 Financial Statements and Long-Term Financial Planning
spontaneously with sales. If the firm is operating at full capacity and no new debt or
equity is issued, what external financing is needed to support the 20 percent growth
rate in sales?
Current assets
Cash
Sales
Costs
Other expenses
Earnings before interest and taxes
Interest paid
Taxable income
Taxes
Net income
Total assets
Dividends
Addition to retained earnings
Assets
Accounts receivable
Inventory
Total
MOOSE TOURS, INC.
2008 Income Statement
Fixed assets
Net plant and equipment
MOOSE TOURS, INC.
Balance Sheet as of December 31, 2008
$33,735
78,715
413,000
Current liabilities
$ 25,300
40,700
86,900
Total
$152,900 Long-term debt
Owners' equity
Liabilities and Owners' Equity
Accounts payable
Notes payable
$929,000
723,000
19,000
$187,000
14,000
$173,000
60,550
$112,450
$ 68,000
17,000
$ 85,000
$158,000
Common stock and paid-in surplus $140,000
Retained earnings
182,900
Total
$322,900
$565,900 Total liabilities and owners' equity
$565,900
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Transcribed Image Text:25. Calculating EFN [LO2] The most recent financial statements for Moose Tours, Inc., follow. Sales for 2009 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, and accounts payable increase PART 2 Financial Statements and Long-Term Financial Planning spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales? Current assets Cash Sales Costs Other expenses Earnings before interest and taxes Interest paid Taxable income Taxes Net income Total assets Dividends Addition to retained earnings Assets Accounts receivable Inventory Total MOOSE TOURS, INC. 2008 Income Statement Fixed assets Net plant and equipment MOOSE TOURS, INC. Balance Sheet as of December 31, 2008 $33,735 78,715 413,000 Current liabilities $ 25,300 40,700 86,900 Total $152,900 Long-term debt Owners' equity Liabilities and Owners' Equity Accounts payable Notes payable $929,000 723,000 19,000 $187,000 14,000 $173,000 60,550 $112,450 $ 68,000 17,000 $ 85,000 $158,000 Common stock and paid-in surplus $140,000 Retained earnings 182,900 Total $322,900 $565,900 Total liabilities and owners' equity $565,900
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