7. A Vancouver firm has a payout ratio of 40 percent and a sustainable growth rate of 8.5%. The capital intensity ratio is 1.1 and the debt-equity ratio is .5. What is the profit margin?

A. 5.4%

B. 7.9%

C. 9.6 %

D. 11.9%

E. 14.4%

8. George Consulting, Inc. is currently operating at 90 percent of capacity. The profit margin and the dividend payout ratio are projected to remain constant. Sales are projected to increase by 8% next year. What is the projected addition to retained earnings for next year given the current retained earnings stand at $415.50 mn?

A. $149.58

B. $299.16

C. $448.74

D. $598.32

E. $650.24

9. Calculate the payout ratio from the following available information : EBIT $150,000; interest expense $16,000; tax rate 30%; dividends paid $40,000.

A. 35.55%

B. 36.43%

C. 63.57%

D. 65.45%

E. 68.23%

10. Calculate retention ratio given the following information: EBIT $150,000; interest expense $16,000; tax rate 30%; dividends paid $40,000.

A. 35.55%

B. 36.43%

C. 56.36%

D. 65.45%

E. 68.23%