Assets, accounts payable and costs are proportional to sales. Debt and equity are not. The sales of Douglass Enterprises are expected to increase by 10% next year. The debt-equity ratio
And the dividend payout ratio are to be held constant. Currently the ﬁrm is producing at 88% of
Capacity. What is the required increase in net ﬁxed assets?

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 Assets, accounts payable and costs are proportional to sales. Debt and equity are not. The sales of Douglass Enterprises are expected to increase by 10% next year. The debt-equity ratio
And the dividend payout ratio are to be held constant. Currently the ﬁrm is producing at 88% of
Capacity. What is the required increase in net ﬁxed assets?

Assets, Accounts Payable and Costs Are Proportional to Sales