The Cookie Shoppe expects sales of $437,500 next year. The profit margin is 5.3 percent and the firm has a 30 percent dividend payout ratio

The Cookie Shoppe expects sales of $437,500 next year. The profit margin is 5.3 percent and the firm has a 30 percent dividend payout ratio. What is the projected increase in retained earnings?    A.  $16,231 B.  $17,500 C.  $18,300 D.  $20,600 E.  $21,000 Change in retained earnings = $437,500 × .053 × (1 - 0.30) = $16,231

47.	Gladsden Refinishers currently has $21,900 in sales and is operating at 45 percent of the firm's capacity. What is the full capacity level of sales?    A.  $31,755 B.  $36,250 C.  $48,667 D.  $51,333 E.  $54,500 Full-capacity sales = $21,900/0.45 = $48,667

48.

The Corner Store has $219,000 of sales and $193,000 of total assets. The firm is operating at 87 percent of capacity. What is the capital intensity ratio at full capacity?    A.  0.62 B.  0.68 C.  0.77 D.  1.35 E.  1.47 Full-capacity sales = $219,000/0.87 = $251,724.14 Capital intensity ratio = $193,000/$251,724.14 = 0.77

49.

Miller Bros. Hardware is operating at full capacity with a sales level of $689,700 and fixed assets of $468,000. The profit margin is 7 percent. What is the required addition to fixed assets if sales are to increase by 10 percent?    A.  $3,276 B.  $4,680 C.  $28,400 D.  $32,760 E.  $46,800 Required addition to fixed assets = $468,000 × 0.10 = $46,800 Or, Capital intensity ratio = $468,000/$689,700 = 0.678556 Required addition to fixed assets = $689,700 × 0.10 × 0.678556 = $46,800