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5. Sales and Growth: The most recent financial...




5. Sales and Growth: The most recent financial statements for Fontenot Co. are shown here: Income Statement Sales $67,000 Current assets $ 31,000 Long-term debt $ 68,000 Costs 43,800 Fixed assets 118,000 Equity 81,000 Taxable income $23,200 Total $149,000 Total $149,000 Taxes (34%) 7,888 Net income $15,312 Balance She Assets and costs are proportional to sales. The company maintains a constant 30 percent 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? SEE ATTACHMENT FOR # 5


Paper#7066 | Written in 18-Jul-2015

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