Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The most recent financial statements for Wise Co. are shown here: Income Statement Balance Sheet Sales $ 52,600 Current assets $ 23,200 Long-term debt $
The most recent financial statements for Wise Co. are shown here: |
Income Statement | Balance Sheet | ||||||||||
Sales | $ | 52,600 | Current assets | $ | 23,200 | Long-term debt | $ | 54,000 | |||
Costs | 42,300 | Fixed assets | 93,000 | Equity | 62,200 | ||||||
| | | | | | ||||||
Taxable income | $ | 10,300 | Total | $ | 116,200 | Total | $ | 116,200 | |||
Taxes (34%) | 3,502 | | | | | ||||||
| | ||||||||||
Net income | $ | 6,798 | |||||||||
| | ||||||||||
|
Assets and costs are proportional to sales. The company maintains a constant 40 percent dividend payout ratio and a constant debtequity ratio. |
What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started