As a firm grows, it must support increases in revenue with new investments in assets. The self$-$supporting growth model helps a firm assess how rapidly it can grow, while maintaining a balance between its cash outflows $($increases in noncash assets$)$ and inflows $($funds resulting from increases in liabilities or equity$).$

Consider this case:

Green Caterpillar Garden Supplies Inc. has no debt in it$$ capital structure and has $$150$ million in assets. Its sales revenues last year were $$45$ million with a net income of $$5$ million. The company distributed $$1\mathrm{.}85$ million as dividends to its shareholders last year.

What is the firm's self$-$supporting, growth rate? $($Note: Do not round your intermediate calculations.$)$

$3\mathrm{.}04\%$

$1\mathrm{.}25\%$

$4\mathrm{.}79\%$

$2\mathrm{.}15\%$

Which of the following are assumptions of the self$-$supporting growth model? Check all that apply.

The firm pays no dividends.

The firm's total asset turnover ratio remains constant.

The firm maintains a constant net profit margin.

The firm maintains a constant ratio of assets to equity.