
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:The most recent financial statements for Crosby. Inc., follow. Sales for 2018 are projected to grow by 30
percent. Interest expense will remain constant
co
; the tax rate and the dividend payout rate will also remain
other expenses, current assets, fixed assets, and accounts payable increase
Costs,
usly with sales.
CROSBY, INC
2017 Income Statement
Saies
Costs
Other expenses
$765,000
621.000
30,000
Earnings before interest and taxes
Interest paid
s 114.000
4,800
Taxable income
Taxes (22%)
$ 99,200
21,824
Net income
s 77,378
Dividends
Addition to retained earnings
5 24.840
52,536
CROSBY. INC
Balance Sheet as of December 31, 2017
Assets
Liabilities and Owners' Equity
Current sssets
Current liabilities
Cash
Accounts receivable
s 25,440 Accounts paysble
s 62.200
34.880 Notes payable
18,200
S 80,400
s 113,000
Inventory
71.600 Total
Total
$ 131.920
Long-term debt
Owners equity
Fixed assets
Common stock and paid-in surplus
Retained earnings
Net plant and equipment
$222.000
112.000
48.520
S 180,520
5353.920
Total
Total assets
5 253.920
Total liabilities and owners equity
What is the EFN f the firm wishes to keep its debt-equity ratio constant? (Do not round intermediate
calculations and round your answer to the nearest whole dollar amount, e.g 32.)
EFN
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