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

Sales	$19,700
Costs	15,250
Taxes	1,513
Net income	2,937
Current assets	3,018
Fixed assets	18,282
Current liabilities	2,940
Long-term debt	7,600
Equity	10,760

Assets and costs are proportional to sales. The company maintains a constant 40 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained next year assuming no new equity is issued?

A.

$2,151

B.

$3,211

C.

$5,804

D.

$3,858

E.

$5,667

90.

Fix-It Co. wishes to maintain a growth rate of 9.89 percent a year, a constant debt-equity ratio of .42, and a dividend payout ratio of 40 percent. The ratio of total assets to sales is constant at 1.3. What profit margin must the firm achieve?

A.	8.13 percent
B.	13.46 percent
C.	13.73 percent
D.	14.33 percent
E.	14.74 percent

AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply EOC: 4-18 Learning Objective: 04-03 The determinants of a firms growth. Section: 4.4 External Financing and Growth Topic: Internal and sustainable growth rates

91.

A firm wishes to maintain a growth rate of 8 percent and a dividend payout ratio of 62 percent. The ratio of total assets to sales is constant at 1, and the profit margin is 10 percent. What must the debt-equity ratio be if the firm wishes to keep these ratios constant?

A.	.05
B.	.40
C.	.55
D.	.60
E.	.95

AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply EOC: 4-19 Learning Objective: 04-03 The determinants of a firms growth. Section: 4.4 External Financing and Growth Topic: Internal and sustainable growth rates

92.

A firm wishes to maintain an internal growth rate of 11 percent and a dividend payout ratio of 24 percent. The current profit margin is 7 percent and the firm uses no external financing sources. What must the total asset turnover rate be?

A.	0.87 times
B.	0.90 times
C.	1.01 times
D.	1.15 times
E.	1.86 times

show the explanation to the questions please.