A Firm Has Net Income of $439,000 on Sales of $690,000

question 55

Multiple Choice

A firm has net income of $439,000 on sales of $690,000. Sales are expected to increase by 4% next year and the dividend payout ratio is 40%. The firm uses the percentage of sales approach when compiling pro forma statements. What amount is expected to be added to retained earnings next year?

• A)$241,300
• B)$253,000
• C)$273,936
• D)$307,550
• E)$322,048

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Definitions:

Reinforcer

In behavioral psychology, an event or stimulus that increases the likelihood of a behavior being repeated.

Behavior

The actions or reactions of a person or animal in response to external or internal stimuli.

Contingent Reinforcement

A method of reinforcing behavior only after the behavior is exhibited, used in behavior modification programs.

Reinforcer

is a stimulus, which, when following a behavior, increases the likelihood of that behavior being repeated.