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Assets and costs are proportional to sales. The company maintains a constant 18 percent dividend...

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Accounting

Assets and costs are proportional to sales. The company maintains a constant 18 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?

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The most recent financial statements for Alexander Co. are shown here: Income Statement Sales $55,000 Balance Sheet $86,130 Long-term debt 47,520 Equity Current assets Fixed assets $59,400 74,250 Total $133,650 Total $133,650 Costs 35,200 Taxable $19,800 income Taxes (24%) 4,752 Net income $15,048 Assets and costs are proportional to sales. The company maintains a constant 18 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

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