P4-8 Sales and Growth [LO2]

The most recent financial statements for Throwing Copper Co. are shown here:

Income Statement		Balance Sheet
Sales	$45,000	Current assets	$70,470	Long-term debt	$48,600
Costs	28,800	Fixed assets	38,880	Equity	60,750
Taxable income	$16,200	Total	$109,350	Total	$109,350
Taxes (34%)	5,508
Net income	$10,692

Assets and costs are proportional to sales. The company maintains a constant 20 percent dividend payout ratio and a constant debtequity ratio.

Required:

What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round your intermediate calculations.)

which of the following is the answer

$1,641.79

$7,374.3

$3,818.71

$7,274.3

$7,474.3