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The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 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 assets, fixed assets, and accounts payable increase spontaneously with sales.

MOOSE TOURS, INC.

2015 Income Statement

Sales

$

751,000

Costs

586,000

Other expenses

22,000

Earnings before interest and taxes

$

143,000

Interest expense

18,000

Taxable income

$

125,000

Taxes (35%)

43,750

Net income

$

81,250

 

Dividends

$

30,000

Addition to retained earnings

51,250

 

MOOSE TOURS, INC.

Balance Sheet as of December 31, 2015

Assets

Liabilities and Owners’ Equity

Current assets

Current liabilities

Cash

$

21,040

Accounts payable

$

55,200

Accounts receivable

33,360

Notes payable

14,400

Inventory

70,320

Total

$

69,600

Total

$

124,720

Long-term debt

$

134,000

Fixed assets

Owners’ equity

Net plant and equipment

$

240,000

Common stock and paid-in surplus

$

120,000

Retained earnings

41,120

Total

$

161,120

Total assets

$

364,720

Total liabilities and owners’ equity

$

364,720

 

What is the EFN if the firm wishes to keep its debt–equity ratio constant? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 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 assets, fixed assets, and accounts payable increase spontaneously with sales.

 

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