The most recent financial statement for Throwing Copper Co. are shown here:
|
Income Statement
|
Balance Sheet
|
|
Sales
|
$42,000
|
Current assets
|
$21,000
|
Long-term debt
|
$51,000
|
|
Costs
|
28,500
|
Fixed assets
|
86,000
|
Equity
|
56,000
|
|
Taxable income
|
$13,500
|
Total
|
$107,000
|
Total
|
$107,000
|
|
Taxes (34%)
|
4,590
|
|
|
|
|
|
Net income
|
$8,910
|
|
|
|
|
Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio.
Required:
What is the maximum increase in sales that can be sustained assuming no new equity is issued?
- $5,364.03
- $5,164.03
- $2,105.24
- $5264.03
- $2,599.70