Find EFN Calculating EFN The most recent financial statements for Moose Tours, Inc., follow. Sues for 2007
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Calculating EFN The most recent financial statements for Moose Tours, Inc., follow. Sues for 2007 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 as- sets, and accounts payable increase 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? Sales Costs Other expenses Total assets Earnings before interest and taxes Interest paid Taxable income Taxes (35%) Net income MOOSE TOURS, INC. 2006 Income Statement Dividends Addition to retained earnings Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment $ 25,000 43,000 76,000 $144,000 MOOSE TOURS, INC. Balance Sheet as of December 31, 2006 $364,000 $42,458 63,687 $508,000 $905.000 710,000 12,000 Current liabilities $183,000 19,700 Accounts payable Notes payable Total Long-term debt $163,300 57,155 $106,145 Liabilities and Owners' Equity Owners' equity Common stock and paid-in surplus Retained earnings Total Total liabilities and owners' equity $ 65,000 9,000 $ 74,000 $156,000 $ 21,000 257,000 $278,000 $508,000 Calculating EFN The most recent financial statements for Moose Tours, Inc., follow. Sues for 2007 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 as- sets, and accounts payable increase 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? Sales Costs Other expenses Total assets Earnings before interest and taxes Interest paid Taxable income Taxes (35%) Net income MOOSE TOURS, INC. 2006 Income Statement Dividends Addition to retained earnings Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment $ 25,000 43,000 76,000 $144,000 MOOSE TOURS, INC. Balance Sheet as of December 31, 2006 $364,000 $42,458 63,687 $508,000 $905.000 710,000 12,000 Current liabilities $183,000 19,700 Accounts payable Notes payable Total Long-term debt $163,300 57,155 $106,145 Liabilities and Owners' Equity Owners' equity Common stock and paid-in surplus Retained earnings Total Total liabilities and owners' equity $ 65,000 9,000 $ 74,000 $156,000 $ 21,000 257,000 $278,000 $508,000
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Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date:
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