Income Statement Balance Sheet Long-term debt 35,750 Fixed assets 68,550 Equity Current Sales $43,550 $ 17,900 $ 37,270 assets Costs 49,180 Тахаble $ 7,800 Total $86,450 Total $86,450 income Taxes (25%) 1,950 Net income $ 5,850 Assets and costs are proportional to sales. The company maintains a constant 55 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued?

Income Statement Balance Sheet Long-term debt 35,750 Fixed assets 68,550 Equity Current Sales $43,550 $ 17,900 $ 37,270 assets Costs 49,180 Тахаble $ 7,800 Total $86,450 Total $86,450 income Taxes (25%) 1,950 Net income $ 5,850 Assets and costs are proportional to sales. The company maintains a constant 55 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.2.3MBA

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