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 $ $760,000$

Costs $595,000$

Other expenses $31,000$

Earnings before interest and taxes $ $134,000$

Interest expense $27,000$

Taxable income $ $107,000$

Taxes $(22\%)23,540$

Net income $ $83,460$

Dividends $ $25,038$

Addition to retained earnings $58,422$

CROSBY, INCORPORATED

Balance Sheet as of December $31,2021$

Assets Liabilities and Owners$$ Equity

Current assets Current liabilities

Cash $ $21,940$ Accounts payable $ $56,100$

Accounts receivable $44,880$ Notes payable $15,300$

Inventory $104,960$ Total $ $71,400$

Total $ $171,780$ Long$-$term debt $ $143,000$

Fixed assets Owners$$ equity

Net plant and equipment $ $436,000$ Common stock and paid$-$in surplus $ $121,000$

Retained earnings $272,380$

Total $ $393,380$

Total assets $607,780$ Total liabilities and owners$$ equity $ $607,780$

If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the $25$ percent growth rate in sales? $($Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

Answer rating: 100% (QA)

To determine the external financing needed to support a 25 growth rate in sales for Crosby Incorpora... View the full answer