Use the following to answer que Tollowing to answer questions 6-9: Stone Roses Co. Balance Sheet Cash Inventory Fixed assets $ 50 $150 $600 Accounts payable Notes payable Long-term debt Equity Total liabilities equity S100 100 350 250 $800 Total assets $800 Stone Roses Co. Income statement Sales Costs EBT Taxes (34%) Net income $800 600 $200 68 $132 6. Suppose that current assets, costs, and accounts payable maintain a constant ratio to sales. The firm retains 40% of earnings. If the firm is producing at only 90% capacity, what is the total external financing needed if sales increase 25%? A) $1 B) $34 C) S41 D) $47 E) $94 7. Suppose the firm wishes to maintain a constant debt-equity ratio, retains 60% of net income, and raises no new equity. Assets and costs maintain a constant ratio to sales. What is the maximum increase in sales the firm can achieve? A) $88 B) $249 C) $371 D) $429 E) $580 8. Suppose the firm retains 28% of earnings, while assets and costs maintain a constant percentage of sales. If the firm is producing at full capacity, what is the internal growth rate? A) 1.9% B) 4.8% C) 10.1% D) 13.5% E) 17.3% 9. Suppose that assets and costs maintain a constant ratio to sales. The firm retains 30% of earnings. If the firm is producing at full capacity, what is the maximum growth rate, assuming no equity sales, that will maintain a constant debt-equity ratio? A) 5.2% B) 15.6% C) 18.8% D) 21.0% E) 29.2% Use the following to answer que Tollowing to answer questions 6-9: Stone Roses Co. Balance Sheet Cash Inventory Fixed assets $ 50 $150 $600 Accounts payable Notes payable Long-term debt Equity Total liabilities equity S100 100 350 250 $800 Total assets $800 Stone Roses Co. Income statement Sales Costs EBT Taxes (34%) Net income $800 600 $200 68 $132 6. Suppose that current assets, costs, and accounts payable maintain a constant ratio to sales. The firm retains 40% of earnings. If the firm is producing at only 90% capacity, what is the total external financing needed if sales increase 25%? A) $1 B) $34 C) S41 D) $47 E) $94 7. Suppose the firm wishes to maintain a constant debt-equity ratio, retains 60% of net income, and raises no new equity. Assets and costs maintain a constant ratio to sales. What is the maximum increase in sales the firm can achieve? A) $88 B) $249 C) $371 D) $429 E) $580 8. Suppose the firm retains 28% of earnings, while assets and costs maintain a constant percentage of sales. If the firm is producing at full capacity, what is the internal growth rate? A) 1.9% B) 4.8% C) 10.1% D) 13.5% E) 17.3% 9. Suppose that assets and costs maintain a constant ratio to sales. The firm retains 30% of earnings. If the firm is producing at full capacity, what is the maximum growth rate, assuming no equity sales, that will maintain a constant debt-equity ratio? A) 5.2% B) 15.6% C) 18.8% D) 21.0% E) 29.2%