What is the internal growth rate

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Question - Use the following information for Motion Research, Inc. (MRI) for this and the following two questions.

Sales $200,000

Costs $105,000

SG&A $20,000

Depreciation $16,000

Dividend paid $6,000

Retained Earnings Added $18,000

Total Assets $85,000

Equity $45,000

Tax Rate 35%

Required -

1. How much was the interest charge for MRI?

2. If the profit margin, total asset turnover, and dividend payout ratios for MRI remain unchanged, what is the internal growth rate it can achieve during the following year?

3. If MRI sales grow at the internal growth rate during the following year, what will be the Total Debt Ratio at the end of the year?

Reference no: EM132797913

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