The Most Recent Financial Statements for Matrix Chip Are Shown

question 31

Multiple Choice

The most recent financial statements for Matrix Chip are shown below. Assets, costs, and current liabilities are proportional to sales. Matrix Chip maintains a constant 50% dividend payout. No external financing is possible. What is the maximum percentage increase in sales that can be sustained?

• A) 5.55%
• B) 8.14%
• C) 10.22%
• D) 22.72%

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Definitions:

Marginal Product

The increase in output that results from a one-unit increase in the input, holding all other inputs constant.

Average Product

The output produced per unit of input, for example, the amount of goods produced per worker or per machine in a given time period.

Formula

A mathematical expression that represents relationships between variables or symbols to calculate a specific value or set of values.

Capital Intensive

Industries or processes that require large amounts of capital investment in heavy machinery or equipment rather than labor.