Assumptions: The firm is operating at 85% capacity. Sales are expected to increase by 20%. Interest...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assumptions: The firm is operating at 85% capacity. Sales are expected to increase by 20%. Interest expense will remain constant. Tax rate and dividend payout ratio remain constant. COGS, other expenses, and total current assets increase with sales. Accounts payable will be 7% of sales. Determine EFN. Assume external funds will be raised as follows: 20% notes payable, 30% long-term debt, and 50% common stock. Income Statement for Fleury, Inc. Year Ended December 31, 2020 Forecast Sales $743,000 $578,000 $ 15,200 $149,800 $ 11,200 COGS Other expenses EBIT Interest $138,600 $ 48,510 $ 90,090 $ 18,018 $ 72,072 EBT Taxes (35%) Net income Dividends Add. to Retained Earnings Balance Sheet for Fleury, Inc. as of December 31, 2020 $ 15,240 $ 37,560 $ 69,520 $122,320 $330,400 Cash Receivables Inventories Total current assets Net fixed assets Total assets $452,720 $ 54,400 $ 13,600 $ 68,000 $126,000 $194,000 Accounts payable Notes payable Total current liabilities Long-term debt Total debt $112,000 $146,720 Common stock Retained Earnings Total Common equity $258,720 Total liabilities & equity $452,720 Assumptions: The firm is operating at 85% capacity. Sales are expected to increase by 20%. Interest expense will remain constant. Tax rate and dividend payout ratio remain constant. COGS, other expenses, and total current assets increase with sales. Accounts payable will be 7% of sales. Determine EFN. Assume external funds will be raised as follows: 20% notes payable, 30% long-term debt, and 50% common stock. Income Statement for Fleury, Inc. Year Ended December 31, 2020 Forecast Sales $743,000 $578,000 $ 15,200 $149,800 $ 11,200 COGS Other expenses EBIT Interest $138,600 $ 48,510 $ 90,090 $ 18,018 $ 72,072 EBT Taxes (35%) Net income Dividends Add. to Retained Earnings Balance Sheet for Fleury, Inc. as of December 31, 2020 $ 15,240 $ 37,560 $ 69,520 $122,320 $330,400 Cash Receivables Inventories Total current assets Net fixed assets Total assets $452,720 $ 54,400 $ 13,600 $ 68,000 $126,000 $194,000 Accounts payable Notes payable Total current liabilities Long-term debt Total debt $112,000 $146,720 Common stock Retained Earnings Total Common equity $258,720 Total liabilities & equity $452,720
Expert Answer:
Answer rating: 100% (QA)
A B D E 1 2 Income Statement 3 Sales 891600 4 Costs 693600 Other expense... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 978-1285850030
12th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date:
Students also viewed these accounting questions
-
Rhodes, Inc., is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for July: Revenues (220 units @ $520 per unit) $ 114,400 Less Manufacturing costs...
-
Susan plans for her children and children's children to inherit a perpetual annual cash amount entitlement starting at some point in the future. Susan estimates that her investment will be worth one...
-
Baxter Video Productss sales are expected to increase by 20% from $5 million in 2010 to $6 million in 2011. Its assets totaled $3 million at the end of 2010. Baxter is already at full capacity, so...
-
kindly interpret the R squared In order to test its job candidates' technical skills, a company creates a timed Excel test (in minutes) to be completed during the interview. The company asks its...
-
a. When gene probes, fingerprinting, and mapping make it possible for you to know of future genetic diseases in you or one of your children, would you wish to use this technology to find out? b. What...
-
Ethanol (C2H5OH) is currently blended with gasoline as an automobile fuel. (a) Write a balanced equation for the combustion of liquid ethanol in air. (b) Calculate the standard enthalpy change for...
-
Ronda Rousey Fight Times Perhaps the most popular fighter since the turn of the decade, Ronda Rousey is famous for defeating her opponents quickly. The five number summary for the times of her first...
-
Carlton, Weber, and Stansbury share profits equally and have capital balances of $120,000, $70,000, and $80,000, respectively, as of December 31, 2014. Effective January 1, 2015, Stansbury has...
-
M - Shock recently began production of a new product, a smartwatch with a capital investment amounting to RM 1 , 6 0 0 , 0 0 0 . For the first year, the company's target is to earn a net profit equal...
-
Halifax Manufacturing allows its customers to return merchandise for any reason and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of...
-
Transform the following linear program into standard form. minimize x 3x3 subject to 2x1 + x2 20 x2 + 7x3 < 40 X1-10 x > 0 x3 0 1 Show that every linear program can be put in the following...
-
Schein's career life cycle is well known; discuss two of the nine stages of the classic view of a career. Explain why you selected these two out of the nine. What are some ways to reduce intergroup...
-
Textile innovation has revolutionized the way people view textiles. Research a textile innovation that is new to you and sustainable at the same time. Where can brands purchase the textile in bulk?...
-
A Culvert is to be staked out for new Highway Construction along a tangent section of the road. The station and offset information for each end of the culvert is Sta. 31+48.35, 42' left, and...
-
1. Answer all the questions a) "Strategy Map is one of the important tools to translate the company's strategic Human resources management policies and practices " Explain the statement with...
-
Determining Possible Side Lengths Mr. Anderson is building a triangular-shaped roof for his shed. The triangle must be isosceles with its base (noncongruent ) side measuring 14 feet.
-
The owner of a retail store randomly selected the following weekly data on profits and advertising cost. Week Advertising Cost ($) Profit ($) 1 0 205 2 50 265 3 250 425 4 150 295 5 125 330 Write down...
-
Explain what is meant by vicarious liability and when it is available?
-
In 1983, the Japanese yen-U.S. dollar exchange rate was 245 yen per dollar, and the dollar cost of a compact Japanese-manufactured car was $8,000. Suppose that now the exchange rate is 80 yen per...
-
Wansley Portal Inc., a large Internet service provider, is evaluating the possible acquisition of Alabama Connections Company (ACC), a regional Internet service provider. Wansley's analysts project...
-
The rate of return on a bond held to its maturity date is called the bond's yield to maturity. If interest rates in the economy rise after a bond has been issued, what will happen to the bond's price...
-
Explain how the financial manager might use industry norms in the design of the companys financing mix.
-
You have developed the following income statement for Sing-Tel Corporation. It represents the most recent years operations, which ended yesterday. Your supervisor in the controllers office has just...
-
Financial data for three corporations are displayed here. MEASURE FIRM FIRM FIRM INDUSTRY A B C NORM Debt ratio 21% 24% 39% 21% Times interest 7.5 10.2 7.0 9.1 times earned times times times...
Study smarter with the SolutionInn App