The most recent financial statements for Alexander Co. are shown here:
| Income Statement |
|
Balance Sheet |
|
| Sales |
$ |
53,000 |
|
Current assets |
$ |
24,400 |
|
Long-term debt |
$ |
47,000 |
|
| Costs |
|
42,500 |
|
Fixed assets |
|
95,000 |
|
Equity |
|
72,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Taxable income |
$ |
10,500 |
|
Total |
$ |
119,400 |
|
Total |
$ |
119,400 |
|
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|
|
|
|
|
|
|
|
|
|
| Taxes (34%) |
|
3,570 |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
| Net income |
$ |
6,930 |
|
|
|
|
|
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Assets and costs are proportional to sales. The company maintains a constant 20 percent dividend payout ratio and a constant debt-equity ratio.
What is the maximum dollar increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Maximum increase in sales $