The most recent financial statements for Tran Company are shown here: Income Statement Balance Sheet Sales Costs Taxable income Taxes (24%) Net income $44,900 36,200 $8,700 2,088 $6,612 Maximum dollar increase Current assets Fixed assets Total $18,620 69,000 $ 87,620 Long-term debt Equity Total $ 37,720 49,900 $ 87,620 Assets and costs are proportional to sales. The company maintains a constant 45 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.)
The most recent financial statements for Tran Company are shown here: Income Statement Balance Sheet Sales Costs Taxable income Taxes (24%) Net income $44,900 36,200 $8,700 2,088 $6,612 Maximum dollar increase Current assets Fixed assets Total $18,620 69,000 $ 87,620 Long-term debt Equity Total $ 37,720 49,900 $ 87,620 Assets and costs are proportional to sales. The company maintains a constant 45 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ee 49.
Transcribed Image Text:The most recent financial statements for Tran Company are shown here:
Income Statement
Balance Sheet
$18,620 Long-term debt
69,000 Equity
$ 87,620
Sales
Costs
Taxable income
Taxes (24%)
Net income
$44,900
36,200
$8,700
2,088
$6,612
Maximum dollar increase
Current assets
Fixed assets
Total
Total
$37,720
49,900
$ 87,620
Assets and costs are proportional to sales. The company maintains a constant 45
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.)
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