6. The plowback ratio is A) equal to net income divided by the change in total equity. B) the percentage of net income available to the firm to fund future growth. C) equal to one minus the retention ratio. D) the change in retained earnings divided by the dividends paid E) the dollar increase in net income divided by the dollar increase in sales. 7. Which one of the following has the least effect on a firm's sustainable rate of growth? A) Capital intensity ratio B) Profit margin C) Dividend policy D) Debt-equity ratio E) Quick ratio 8. Baked at Home Cookies expects sales of S672.500 next year. The profit margin is 4.6 percent and the firm has a dividend payout ratio of 15 percent. What is the projected increase in retained earnings? A) S26,294.75 B) S17,500.50 C) $4,640.25 D) S20,640.25 E) S30,935.00 9. Financial plans generally tend to ignore A) dividend policy. B) managers goals and objectives. C) risks associated with cash flows. D) operating capacity levels. E) capital structure policy 10. The maximum rate of growth a corporation can achieve can be increased by A) avoiding new extemal equity financing. B) increasing the corporate tax rate. C) increasing the retention ratio. D) increasing the dividend payout ratio. E) increasing the sales forecast. 11. Andy deposited S3,000 this morning into an account that pays 5 percent interest, compounded annually. Barb also deposited S3,000 this morning at 5 percent interest, compounded annually. Andy will withdraw his interest earnings and spend it as soon as possible. Barb will reinvest her interest earnings into her account. Given this, which one of the following statements is true? A) Barb will earn more interest in Year I than Andy will. B) Andy will earn more interest in Year 3 than Barb will. C) Barb will earn more interest in Year 2 than Andy D) After five years, Andy and Barb will both have eaned the same amount of interest