What is the maximum dollar increase in sales

Assignment Help Financial Management

Reference no: EM132070064

The most recent financial statements for Alexander Co. are shown here:

Income Statement Balance Sheet Sales $ 49,800 Current assets $ 23,400 Long-term debt $ 52,500 Costs 37,900 Fixed assets 90,000 Equity 60,900 Taxable income $ 11,900 Total $ 113,400 Total $ 113,400 Taxes (34%) 4,046 Net income $ 7,854 Assets and costs are proportional to sales.

The company maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued?

(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Maximum increase in sales $

Reference no: EM132070064

Questions Cloud

What is the maximum dollar increase in sales that can : What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued?

Evaluate the amount dividends was paid to shareholders : The retained earnings at the end of the previous year were 269,000. How much in dividends was paid to shareholders during the year?

What is the present value of investment : He must invest $10,000 at the start of the first year and an additional $10,000 at the end of the first year.

Share of common stock : McCall Corporation has a capital structure consisting of 55 percent common equity, 30 percent debt, and 15 percent preferred stock.

What is the maximum dollar increase in sales : The company maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio.

Calculating costs and break-even : Calculating Costs and Break-Even [LO3] Night Shades, Inc. (NSI), manufactures biotech sunglasses.

Projected roe between the restricted and relaxed policies : Under a relaxed policy, current assets will be 25% of sales. What is the difference in the projected ROEs between the restricted and relaxed policies?

Are you happy with the risk-adjusted portfolio performance : The statement indicates that your portfolio return for the past year was up 25%. In addition, you noticed, within the statement, that the S&P rose 18%.

Machine with a fully automated machine : Your firm is replacing a manually-operated machine with a fully automated machine. The old machine was purchased 5 years ago

User Account

All Pages