The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 30 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. CROSBY, INC. 2017 Income Statement

Sales $755,000
Costs 792,960
Other expenses 20,060
Earnings before interest and taxes $167,740
Interest paid 14,740
Taxable income $153,000
Taxes (21%) 32,130
Net income $120,870
Dividends $39,250
Addition to retained earnings 81,620

CROSBY, INC. Balance Sheet as of December 31, 2017

Assets Liabilities and Owners’ Equity

Current assets Current liabilities
Cash $27,920 Accounts payable $71,720
Accounts receivable 42,630 Notes payable 17,620
Inventory 95,910 Total $89,340
Total $166,460 Long-term debt $170,000

Fixed assets Owners’ equity

Net plant and equipment $455,980 Common stock and paid-in surplus $140,000
Retained earnings 223,100

Total $363,100

Total assets $622,440 Total liabilities and owners’ equity $622,440

Required:
What is the EFN if the firm wishes to keep its debt-equity ratio constant?