iLearn : MBA_602N_700_16F : Tests & Quizzes

Smith Machines Inc. has a net income this year of $500 on sales of $2,000 and is operating its fixed assets at full capacity. Management expects sales to increase by 50 percent next year and is forecasting a dividend payout ratio of 30 percent. The profit margin is not expected to change. If spontaneous liabilities are $500 this year and no excess funds are expected next year, what are Smith's total assets this year?

• A. a. $ 1,250
• B. b. $1,550
• C. c. $2,750
• D. d. $3,425
• E. e. $3,574