1. Ed’s Market is operating at full capacity with a sales level of $547,200 and fixed assets of $471,000. The profit margin is 5.4 percent. What is the required addition to fixed assets if sales are to increase by 4 percent?
A. $10,709
B. $14,680
C. $22,400
D. $16,760
E. $18,840
2. Robotics desires a sustainable growth rate of 9.5 percent while maintaining a 30 percent dividend payout ratio and a 12 percent profit margin. The company has a capital intensity ratio of .95. What equity multiplier is required to achieve the company's desired rate of growth?
A. .84
B. .98
C. 1.02
D. 1.19
E. 1.11
Show the explanation to the questions please.