Question
The most recent financial statements for Throwing Copper Co. are shown here: Income Statement Balance Sheet Sales $42,000 Current assets $21,000 Long-term debt $51,000 Costs
The most recent financial statements for Throwing Copper Co. are shown here: |
Income Statement | Balance Sheet | ||||
Sales | $42,000 | Current assets | $21,000 | Long-term debt | $51,000 |
Costs | 28,500 | Fixed assets | 86,000 | Equity | 56,000 |
Taxable income | $13,500 | Total | $107,000 | Total | $107,000 |
Taxes (34%) | 4,590 |
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Net income | $8,910 |
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Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt?equity 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.) $2,599.70 is that correct? |
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