What is the maximum internal growth rate

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Question - a. Current assets are $200, sales are $1,000, current liabilities are $30, the profit margin is 8%, and the firm is not paying dividends. If sales increase 30%, what additional funds are needed?

b. If the return on assets is 15% and the dividend par out ratio is 50%, what is the maximum internal growth rate? Re-compute the maximum internal growth rate for a return on assets of 10%, then 20%. Re-compute the maximum internal growth rate for a dividend payout ratio of 0%, then 25%.

Reference no: EM133061595

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