Dexter's Has Annual Sales of $53,800, Current Assets of $18,900

question 6

Multiple Choice

Dexter's has annual sales of $53,800, current assets of $18,900, and net working capital of $2,800. Assume this firm is operating at full capacity and that all costs, net working capital, and fixed assets vary directly with sales. The debt-equity ratio and the dividend payout ratio are constant. What is the pro forma current liabilities value for next year if sales are projected to increase by 7.5 percent?

• A) $13,650
• B) $17,308
• C) $19,121
• D) $14,248
• E) $16,810

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