Use the following information for Alpha-Beta, Inc. (ABI): Sales $100,000 Costs $55,000 Depreciation $6,000 Dividend paid $10,000 Retained Earnings Added $14,500 Total Assets $85,000 Equity $45,000 Selling, General and Administrative costs $0 Tax Rate 35% If the profit margin, total asset turnover, and dividend payout ratios for ABI remain unchanged, what is the internal growth rate it can achieve during the following year? a. 25.00% b. 21.86% c. 20.57% d. 19.72% e. 26.87% f. 23.64%
Use the following information for Alpha-Beta, Inc. (ABI): Sales $100,000 Costs $55,000 Depreciation $6,000 Dividend paid $10,000 Retained Earnings Added $14,500 Total Assets $85,000 Equity $45,000 Selling, General and Administrative costs $0 Tax Rate 35% If the profit margin, total asset turnover, and dividend payout ratios for ABI remain unchanged, what is the internal growth rate it can achieve during the following year? a. 25.00% b. 21.86% c. 20.57% d. 19.72% e. 26.87% f. 23.64%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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