Abbreviated financial statements for archimedes levers are


Abbreviated financial statements for Archimedes Levers are shown in the table below. Assume sales and expenses increase by 10% in 2017 and all assets and liabilities increase correspondingly. Income Statement Sales $ 4,000 Costs, including interest 3,500 Net income $ 500 Balance Sheet, Year-End 2016 2015 2016 2015 Net assets $ 3,200 $ 2,700 Debt $ 1,200 $ 1,033 Equity 2,000 1,667 Total $ 3,200 $ 2,700 Total $ 3,200 $ 2,700 a. If the payout ratio is set at 50% and no external debt or equity is to be issued, what is the maximum possible growth rate for Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Internal growth rate % b. If the payout ratio is set at 50% and the firm maintains a fixed debt ratio but issues no equity, what is the maximum possible growth rate for Archimedes? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Sustainable growth rate

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Financial Management: Abbreviated financial statements for archimedes levers are
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