Miller's Hardware Has Current Sales of $42,700, EBIT of $9,700

question 92

Multiple Choice

Miller's Hardware has current sales of $42,700, EBIT of $9,700, net income of $6,600, interest expense of $1,360, and dividends paid of $1,925. Assume the profit margin, debt-equity ratio, and dividend payout ratio are held constant. Sales are expected to increase by $8,000 next year. What is the projected change to retained earnings for next year?

• A) $5,575
• B) $4,994
• C) $4,909
• D) $5,551
• E) $5,386

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Definitions:

Sutures

Threads or staples used by surgeons to close wounds or surgical incisions.

Wound Healing

The process of the body repairing tissue damage through stages that include clotting, inflammation, growth, and remodeling.

Staples

Metal wires bent to form a U shape, used to bind sheets of paper together or to attach materials to surfaces.

Sebaceous Cyst Removal

The surgical procedure to remove a sebaceous cyst, which is a closed sac under the skin filled with a cheese-like or oily material.