East Coast Yachts is planning for a growth rate of 20% next year. What are your

Question

East Coast Yachts is planning for a growth rate of 20% next year.

What are your conclusions and recommendations about the feasibility of East Coast's expansion plans?

I

I alredy solve the question I just need help conclusion and recomendations about the feasibility of East Coast's expansion plans. The EFN is $35,667,726

EAST COAST YACHTS 2017 Income Statement Sales Cost of goods sold Selling, general, and administrative Depreciation EBIT Interest expense EBT Taxes Net income $611,582,000 431,006,000 73,085,700 19,958,400 $87,531,900 11,000,900 76,531,000 30,612,400 $45,918,600 $17,374,500 $28,544,100 Dividends Retained earnings

Explanation / Answer

The East coast can go ahead with the expansion given it will be able to majorly fund the expansion through internal accruals. THe remaining will be funded through EFN (external financing needed) which is of the tune of $35.7 million. As the company is having huge debt to equity, it should not raise funds through debt rather it should raise funds through equity.

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