What is the maximum increase in sales

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Question: The most recent financial statements for Anderson Company are shown here: Income Statement Balance Sheet Sales $ 62,400 Current assets $ 29,400 Long-term debt $ 63,800 Costs 25,200 Fixed assets 124,000 Equity 89,600 Taxable income $ 37,200 Total $ 153,400 Total $ 153,400 Taxes (23%) 8,556 Net income $ 28,644 Assets and costs are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued?

Reference no: EM133559902

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