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How much can consume in september

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Ross River Ltd produces glass containers. In July 2021, the company reported net profits after tax of $500,000 for the financial year 2020 - 2021 and announced that it will pay the annual dividend on 1 September 2021. Due to increased demand the company expects the net profits after tax for the 2021 - 2022 financial year to be 20% higher. Ross River Ltd intends to maintain its current dividend payout ratio of 60% and expects to pay the annual dividend for 2021 - 2022 in 1 September, 2022.

Problem 1: Irina Stanton owns 10% of the ordinary share capital of Ross River Ltd. She has no savings and her sole income comes from Ross River Ltd. If Irina wishes to buy $5,000 worth of furniture in September 2021, and at the same time pay all her other bills totalling $35,000, calculate how much can she consume in September 2022. Assume the market rate of interest is 8% per annum.

Reference no: EM132964547

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