McCormac Co. wishes to maintain a growth rate of 12 percent a year, a debt-equity ratio of 1.20, and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at .75.
Required:
What profit margin must the firm achieve?
- 21.65%
- 9.28%
- 12.18%
- 5.47%
- 5.22%
Seaweed Mfg., Inc., is currently operating at only 95 percent of fixed asset capacity. Fixed assets are $440,000. Current sales are $550,000 and projected to grow to $630,000.
Required:
How much in new fixed assets are required to support this growth in sales?
- $38,700
- $38,800
- $64,000
- $38,900
- $39,000