1. All else equal (that's important), an increase in which one of the following will increase net income?
a. Marginal tax rate
b. Depreciation
c. Fixed costs
d. Dividends
e. Revenue
2. The CEO of JFK Corporation would like to grow sales to $599,500 next year. Assets and costs will grow proportionate to sales, but debt and equity will not. The dividend payout ratio will remain the same as current year. What is the external financing needed?
Sales 550,000
Costs 450,000
Tax rate 35%
Dividends 29,900
Assets 500,000
Debt 200,000
Equity 300,000