| 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 | $ | 747,000 | ||||
| Costs | 582,000 | |||||
| Other expenses | 18,000 | |||||
| Earnings before interest and taxes | $ | 147,000 | ||||
| Interest expense | 15,000 | |||||
| Taxable income | $ | 132,000 | ||||
| Taxes (30%) | 39,600 | |||||
| Net income | $ | 92,400 | ||||
| Dividends | $ | 18,480 | ||||
| Addition to retained earnings | 73,920 | |||||
| MOOSE TOURS, INC. Balance Sheet as of December 31, 2015 | |||||||
| Assets | Liabilities and Owners’ Equity | ||||||
| Current assets | Current liabilities | ||||||
| Cash | $ | 20,640 | Accounts payable | $ | 54,800 | ||
| Accounts receivable | 32,960 | Notes payable | 14,000 | ||||
| Inventory | 69,920 | ||||||
| Total | $ | 68,800 | |||||
| Total | $ | 123,520 | Long-term debt | $ | 130,000 | ||
| Fixed assets | Owners’ equity | ||||||
| Net plant and equipment | $ | 410,000 | Common stock and paid-in surplus | $ | 116,000 | ||
| Retained earnings | 218,720 | ||||||
| Total | $ | 334,720 | |||||
| Total assets | $ | 533,520 | Total liabilities and owners’ equity | $ | 533,520 | ||
| What is the EFN if the firm was operating at only 80 percent of capacity in 2015? Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| EFN | $ [removed] |
