Assets, Accounts Payable and Costs Are Proportional to Sales

question 316

Multiple Choice

Assets, accounts payable and costs are proportional to sales. Debt and equity are not.
The sales of Douglass Enterprises are expected to increase by 9% next year. The debt-equity ratio and the dividend payout ratio are to be held constant. Currently the firm is producing at 82% of capacity. What is the addition to retained earnings?

• A) $311
• B) $385
• C) $437
• D) $475
• E) $518

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Definitions:

Scarce Natural Resources

Natural materials that are available in limited quantities and are critically important for human survival and economic activity.

Refugees

Individuals who are forced to flee their country due to persecution, conflict, violence, or other circumstances that seriously threaten their life or freedom.

Structural Power

The form of power that emerges from the structures, systems, and frameworks within societies, governing social interactions and the distribution of resources.

Global Order

The structured system of geopolitical, economic, and cultural relationships and processes that govern the world's functioning.