Throwing Copper co. Income Statement Sales 50,000 Costs 32,000 Taxable income 18
ID: 2649929 • Letter: T
Question
Throwing Copper co.
Income Statement
Sales 50,000
Costs 32,000
Taxable income 18,000
Taxes (33%) 5940
Net income 12,060
Balance Statement
Current Assets 78,300
Fixed Assets 43,200
Total Assets 121,500
Long term debt 54,000
Equity 67500
Total 121,500
assets and cost proportional to sales. Maintain constant 22% dividend payout ratio and a constant debt to equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued?
Hint: instead of calculating a percent of IGR/SGR you need to turn the growth rate into actual dollars
A. 8096.3
B.2045.74
C.4195.97
D.8196.3
Explanation / Answer
A. 8096.3
The maximum % sales increase is the sustainable growth rate.
For calculation of sustainable growth rate, first we have to calculate the ROE
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.