What is the internal growth rate can achieve

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Reference no: EM132788152

Use the following information for Motion Research, Inc. (MRI)

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%

Problem 1: How much was the interest charge for MRI?

A. $22,077

B. $6,692

C. $9,769

D. $12,846

E. $19,000

F. $15,923

Problem 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?

A. 26.87%

B. 30.77%

C. 37.10%

D. 34.92%

E. 32.81%

F. 28.79%

Reference no: EM132788152

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