1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Law Incorporation [45]
3 years ago
9

44000 Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a consta

nt debt-equity ratio.What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued?

Business
1 answer:
Minchanka [31]3 years ago
7 0

Answer:

Maximum Dollar Increase = $10079.76

Explanation:

(See attachment for full question)

INCOME STATEMENT

Sales ---------- $67,000

Costs ---------- $43,800

EBIT ------------ $23,200

Taxes (34%) ----$7,888

Net income ------$15,312

BALANCE SHEET

Current Assets ------$31,000

Fixed Assets --------- $118,000

Total ------------------- $149,000

Long-term Debt -----$68,000

Equity ------------------- $81,000

Total ----------------- $149,000

Dividend Payout Ratio = 30%

Plowback Ratio is calculated by: 1 - Dividend Payout Ratio

Plowback Ratio = 1 - 30%

Plowback Ratio = 1 - 30/100

Plowback Ratio = 1 - 0.3

Plowback Ratio = 0.7

Plowback Ratio = 70/100

Plowback Ratio = 70%

Return on Equity (ROE) is calculated by: Net Income/Total Equity

Net Income = $15,132

Total Equity = $81,000

ROE = $15,132/$81,000

ROE = 0.186815

ROE = 18.68%

Calculating Sustainable Growth Rate (SGR)

SGR = (ROE * Plowback Ratio)/(1 - ROE * Plowback)

SGR = (0.186815 * 0.7)/( 1 - 0.186815 * 0.7)

SGR = (0.1307705)(1-0.1307705)

SGR = 0.1307705/0.8692295

SGR = 0.150444157728194

SGR = 0.1504

Max increase = (Sales * SGR)= ($67,000 * 0.1504)

Max Increase = $10079.75856778905

Max Increase = $10079.76

You might be interested in
Scholarships, grants and work-study money all reduce the _____ of higher education.
Allushta [10]
I think the answer is A but i could be wrong
6 0
2 years ago
Which pattern of internal migration is most often found in developed countries?
NISA [10]
<span>Seasonal migration is the pattern that is normally found in countries that are developed. This occurs because people tend to visit whatever vacation spots are currently popular and spend at least a week in that location. This pattern is much less likely to occur in countries that are undeveloped.</span>
5 0
3 years ago
the fed took action in late 2008 to significantly decrease the federal funds rate. this action is best considered:
Sedaia [141]

At the end of 2008, the Fed took action to significantly lower the federal funds rate.The best way to describe this action is as offensive.

Quantitative facilitating is a strategy when a national bank endeavors to invigorate the economy by purchasing long haul protections.The Fed wanted to lower the interest rates on 10-year Treasury notes and mortgages.

In response to the Great Recession, what actions did the Federal Reserve take?

To lower interest rates, it bought on the open market.

The Federal Funds Rate—also known as the Federal Funds Target Rate or the Fed Funds Rate—is set by the Federal Open Markets Committee (FOMC) to direct overnight lending among U.S. banks.It is established as a range between two limits.Currently, the federal funds rate is 3.75 percent to 4%.

Learn more about Federal Funds Rate here:

brainly.com/question/1354434

#SPJ4

5 0
1 year ago
Vilas Company is considering a capital investment of $190,100 in additional productive facilities. The new machinery is expected
zheka24 [161]

Answer:

9.49%

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Cash flow in year 0 =  $190,100

cash flow each year from year 1 to 5 =  $49,500

IRR = 9.49%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

6 0
3 years ago
Select all of the tools you could use to track your expenses.
scoundrel [369]
Automatic bill payment,,Budget software.....hope that helps!(:
3 0
3 years ago
Read 2 more answers
Other questions:
  • Algonquin Books partnered with Barnes &amp; Noble to offer a unique _________. If you purchase one of 12 paperback books publish
    6·1 answer
  • Calculate 2007-03-04-00-00_files/i0080000.jpg% tax on $1,540. a. $11.17 b. $109.34 c. $111.65 d. $113.96
    10·1 answer
  • The transition to an information economy was characterized by ______.
    9·1 answer
  • When managers at a large pharmaceutical company look towards the future and think about what could be, they are likely using whi
    9·1 answer
  • Dodge, Incorporated acquires 15% of Gates Corporation on January 1, 2011, for $105,000 when the book value of Gates was $600,000
    7·1 answer
  • ECONOMICS, PLEASE HELP.
    9·1 answer
  • A group of university students toys coconuts from farmers' markets. The students consume the meat of the coconuts for food and u
    8·1 answer
  • How many americans are victims of identity theft each year? about 10,000. about 100,000. about 1 million. about 10 million. abou
    10·1 answer
  • Samantha, a famous artist, has a contract with Alec to paint his portrait for $6,000. Samantha is very busy and wants to delegat
    13·1 answer
  • What is the difference between a price floor and a price ceiling?
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!