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Assets, Accounts Payable and Costs Are Proportional to Sales

Question 135

Multiple Choice

Assets, accounts payable and costs are proportional to sales. Debt and equity are not. The sales of Douglass Enterprises are expected to increase by 9% next year. The debt-equity ratio and the dividend payout ratio are to be held constant. Currently the firm is producing at 82% of capacity. What is the addition to retained earnings? A) $311 B) $385 C) $437 D) $475 E) $518 Assets, accounts payable and costs are proportional to sales. Debt and equity are not. The sales of Douglass Enterprises are expected to increase by 9% next year. The debt-equity ratio and the dividend payout ratio are to be held constant. Currently the firm is producing at 82% of capacity. What is the addition to retained earnings? A) $311 B) $385 C) $437 D) $475 E) $518 Assets, accounts payable and costs are proportional to sales. Debt and equity are not.
The sales of Douglass Enterprises are expected to increase by 9% next year. The debt-equity ratio and the dividend payout ratio are to be held constant. Currently the firm is producing at 82% of capacity. What is the addition to retained earnings?


A) $311
B) $385
C) $437
D) $475
E) $518

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