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Use the below information to answer the following question. This firm is currently operating at 88 percent of capacity. The profit margin and the dividend
Use the below information to answer the following question. This firm is currently operating at 88 percent of capacity. The profit margin and the dividend payout ratio are projected to remain constant. Sales are projected to increase by 6 percent next year. What is the projected addition to retained earnings for next year? Question 6 options: $2,309 $2,152 $1,890 $2,705 $3,074 Please write out the solution and the math/equations used to find the answer. I need help understanding how I solve this one.
\begin{tabular}{|l|r|} \hline \multicolumn{2}{|c|}{ Income Staternent } \\ \hline \multicolumn{2}{|c|}{ For the Year } \\ \hline Sales & $42,700 \\ \hline Cost of goods sold & 29,250 \\ \hline Depreciation & 3,750 \\ \hline & \\ \hline Earningsbeforeinterestandtaxes & $9,700 \\ \hline Interest paid & 1,360 \\ \hline & $8,340 \\ \hline & 2,840 \\ \hline Taxable incorne & \\ \hline Taxes & $5,500 \\ \hline & \\ \hline & \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline \multicolumn{2}{|c|}{ Balance Sheet } \\ \hline \multicolumn{2}{|c|}{ End-of-Year } \\ \hline Cash & $1,320 \\ \hline Accounts receivable & 3,780 \\ \hline Inventory & 10,200 \\ \hline & \\ \hline Total current assets & $15,300 \\ \hline Net fixed assets & 33,600 \\ \hline & \\ \hline & $48,900 \\ \hline Total assets & 18,100 \\ \hline & $48,900 \\ \hline & 15,000 \\ \hline Aotal Liab. \& Equity & \\ \hline Long-term debt & \\ \hline Comnon stock $1 par & \\ \hline valuel & \\ \hline Retained earnings & \\ \hline & \\ \hline \end{tabular}Step by Step Solution
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