Question
The most recent financial statements for Vito's Tavern are as follows: Income Statement Sales$55,000 Costs $40,000 Taxable Income$15,000 Taxes (28%) $4,200 NI $10,800 Balance Sheet
The most recent financial statements for Vito's Tavern are as follows:
Income Statement
Sales$55,000
Costs$40,000
Taxable Income$15,000
Taxes (28%)$4,200
NI$10,800
Balance Sheet
Current Assets$40,000Long-Term Debt$60,000
Fixed Assets$100,000Equity$75,000
Total$140,000Total$135,000
Assets and costs are proportional to sales.Beakman maintains a 10% 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?
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
