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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. 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.)

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter16: Financial Planning And Forecasting
Section: Chapter Questions
Problem 8P: LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and...
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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. 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.)
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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