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Income Statement Sales Costs Taxable income Taxes (24%) Net Income $44,150 35,950 $ 8,200 1,968 $ 6,232 Current assets Fixed assets Total Balance Sheet $18,220 Long-term debt 68,750 Equity $ 86,970 Total $ 37,470 49,500 $ 86,970 Assets and costs are proportional to sales. The company maintains a constant 35 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? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Income Statement Sales Costs Taxable income Taxes (24%) Net Income $44,150 35,950 $ 8,200 1,968 $ 6,232 Current assets Fixed assets Total Balance Sheet $18,220 Long-term debt 68,750 Equity $ 86,970 Total $ 37,470 49,500 $ 86,970 Assets and costs are proportional to sales. The company maintains a constant 35 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? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Essentials Of Investments
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
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The most recent financial statements for Tran Company are shown here: Income Statement Balance Sheet Sales Costs Taxable income Taxes (24%) Net Income $44,150 35,950 $ 8,200 1,968 $ 6,232 Current assets Fixed assets Maximum dollar increase Total $18,220 68,750 $ 86,970 Answer is complete but not entirely correct. S 539.22 Long-term debt Equity Total Return to question Assets and costs are proportional to sales. The company maintains a constant 35 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? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) $ 37,470 49,500 $ 86,970
Transcribed Image Text:The most recent financial statements for Tran Company are shown here: Income Statement Balance Sheet Sales Costs Taxable income Taxes (24%) Net Income $44,150 35,950 $ 8,200 1,968 $ 6,232 Current assets Fixed assets Maximum dollar increase Total $18,220 68,750 $ 86,970 Answer is complete but not entirely correct. S 539.22 Long-term debt Equity Total Return to question Assets and costs are proportional to sales. The company maintains a constant 35 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? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) $ 37,470 49,500 $ 86,970
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