Wax music expects sales of $437,500 next year. the profit margin is 4.8 percent, and the firm has a 30 percent dividend payout r

Question

1 year ago

15

atio. what is the projected increase in retained earnings

1 answer:

zimovet [89] · Answer 1 · 2023-11-10T05:37:59+03:00

$16,231 is the Projected Increase in Retained Earnings.

<h3>Explanation</h3>

get here first Expected Profit that is express as

expected Profit = Sales × Profit Margin .......................1

expected Profit = 437500 × 5.3%

expected Profit = $23187.50

and Dividends is here as

Dividends = Expected Profit × Dividend Payout Ratio .................2

Dividends = 23187.50 × 30%

Dividends = $6956.25

Projected Increase in Retained Earnings will be

Projected Increase in Retained Earnings = expected Profit - Dividends ........3

Projected Increase in Retained Earnings = $23187.50 - $6956.25

Projected Increase in Retained Earnings = $16231.25

There are options missing in the question which is given below-

a. $16,231

b. $17,500

c. $18,300

d. $20,600

e. $21,000

Thus, the correct option is a. $16231

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