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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
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
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