9. The most recent statements for Sullivan Inc. are as follows: Statement of Comprehensive Income Statement of Financial Position Sales Cost Taxable Income Taxes (40%) Net Income $42,000 28,500 $13,500 4,590 $ 8,910 Current Assets Fixed Assets Total $21,000 Debt 86,000 Equity $107,000 Total $51,000 56,000 $107,000 Assets and costs are proportional to sales. Sullivan maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained, assuming no new equity is issued? Do not round intermediate calculations and round your final answer to 2 decimal places.
9. The most recent statements for Sullivan Inc. are as follows: Statement of Comprehensive Income Statement of Financial Position Sales Cost Taxable Income Taxes (40%) Net Income $42,000 28,500 $13,500 4,590 $ 8,910 Current Assets Fixed Assets Total $21,000 Debt 86,000 Equity $107,000 Total $51,000 56,000 $107,000 Assets and costs are proportional to sales. Sullivan maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained, assuming no new equity is issued? Do not round intermediate calculations and round your final answer to 2 decimal places.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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9. The most recent statements for Sullivan Inc. are as follows:
Statement of Comprehensive Income
Statement of Financial Position
Sales Cost
Taxable Income Taxes (40%) Net Income
$42,000 28,500
$13,500 4,590 $ 8,910
Current Assets
Fixed Assets
Total
$21,000 Debt 86,000 Equity
$107,000 Total
$51,000 56,000
$107,000
Assets and costs are proportional to sales. Sullivan maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained, assuming no new equity is issued? Do not round intermediate calculations and round your final answer to 2 decimal places.
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