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A firm wishes to maintain an internal growth rate of 11 percent and a dividend payout ratio of 68 percent. The ratio of total assets to sales is constant at 1.1, and the profit margin is 8.1 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be? The most recent financial statements for Alexander Company are shown here: Income Statement Sales $ 40,000 Costs 25,600 Taxable income $ 14,400 Taxes (23%) 3,312 Net income $ 11,088 Balance Sheet Current assets $62,640 Long-term debt $ 43,200 Fixed assets 34,560 Equity 54,000 Total $ 97,200 Total $ 97,200 Assets and costs are proportional to sales. The company maintains a constant 20 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? Consider the following simplified financial statements for the Wims Corporation (assuming no income taxes): Income Statement Balance Sheet Sales $ 24,000 Assets $ 10,500 Debt $ 5,800 Costs 14,100 Equity 4,700 Net income $ 9,900 Total $ 10,500 Total $ 10,500 The company has predicted a sales increase of 10 percent. It has predicted that every item on the balance sheet will increase by 10 percent as well. Create the pro forma statements and reconcile them. What is the plug variable here