Question: I keep asking this question and they keep answering wrong. please help that is how they present it Problem 18-15 Capacity Use and External Financing

Problem 18-15 Capacity Use and External Financing (L02) The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales Coats EBIT Interest expense Taxable income Taxes (at 215) Net income Dividends $ 22,120 Addition to retained earnings $ 22, 120 $ 240,000 170,000 $70,000 11.000 $ 56,000 11,760 $ 44,240 k aces Asseta Current assets Cash Accounts receivable Inventories Total current Assets Net plant and equipment BALANCE SHEET, YEAR-END, 2019 Liabilities Current IIabilities 7.000 Accounts payable 12,000 Total current liabilities 21,000 Long-term debt $ 40,000 Stockholderst equity 180,000 Common stock plus additional paid in capital Retained earnings $220,000 Total abilities plus stockholders equity 5 14,000 20,000 140.000 15.000 31,000 3220,000 Total assets Agation to retained earnings Assets Current assets Cash Accounts receivable Inventories Total current assets Net plant and equipment BALANCE SHEET, YEAR-END, 2019 Liabilities Current liabilities $ 7,000 Accounts payable 12,000 Total current liabilities 21,000 Long-term debc $40,000 Stockholders' equity 180,000 Common stock plus additional paid in capital Retained earnings $ 220,000 Total liabilities plus stockholders' equity $14.000 $ 14,000 140,000 Total assets 15,000 51,000 69230,000 Sales and costs are projected to grow at 30% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at full capacity, so it plans to increase fixed assets in proportion to sales interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.50 If Growth Industries is operating at only 75% of capacity, how much can sales grow before the firm will need to raise any external funds? Assume that once fixed assets are operating at capacity, they will need to grow thereafter in direct proportion to sales (Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amount.) Final sales Problem 18-15 Capacity Use and External Financing (L02) The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales Coats EBIT Interest expense Taxable income Taxes (at 215) Net income Dividends $ 22,120 Addition to retained earnings $ 22, 120 $ 240,000 170,000 $70,000 11.000 $ 56,000 11,760 $ 44,240 k aces Asseta Current assets Cash Accounts receivable Inventories Total current Assets Net plant and equipment BALANCE SHEET, YEAR-END, 2019 Liabilities Current IIabilities 7.000 Accounts payable 12,000 Total current liabilities 21,000 Long-term debt $ 40,000 Stockholderst equity 180,000 Common stock plus additional paid in capital Retained earnings $220,000 Total abilities plus stockholders equity 5 14,000 20,000 140.000 15.000 31,000 3220,000 Total assets Agation to retained earnings Assets Current assets Cash Accounts receivable Inventories Total current assets Net plant and equipment BALANCE SHEET, YEAR-END, 2019 Liabilities Current liabilities $ 7,000 Accounts payable 12,000 Total current liabilities 21,000 Long-term debc $40,000 Stockholders' equity 180,000 Common stock plus additional paid in capital Retained earnings $ 220,000 Total liabilities plus stockholders' equity $14.000 $ 14,000 140,000 Total assets 15,000 51,000 69230,000 Sales and costs are projected to grow at 30% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at full capacity, so it plans to increase fixed assets in proportion to sales interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.50 If Growth Industries is operating at only 75% of capacity, how much can sales grow before the firm will need to raise any external funds? Assume that once fixed assets are operating at capacity, they will need to grow thereafter in direct proportion to sales (Do not round Intermediate calculations. Round your final answers to the nearest whole dollar amount.) Final sales
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