A Firm Has Net Income of $320,000 and Sales of $3,200,000

question 38

Multiple Choice

A firm has net income of $320,000 and sales of $3,200,000. Its assets total $2,000,000, the equity at the beginning of the year was $1,600,000, and dividends paid were $80,000. What is the sustainable growth rate?

• A)5.50%
• B)15.00%
• C)6.25%
• D)4.75%

---

Definitions:

Division of Labour

The allocation of different tasks to different people or groups in an organization or economy, aimed at increasing efficiency and productivity.

Standard Rules

Established guidelines or procedures that are followed within an organization to maintain consistency and order.

Safety Needs

Fundamental requirements for personal security, protection, and stability, as identified in Maslow's hierarchy of needs.

Stability

The condition in which a system, such as an economy or ecological system, remains consistent and balanced over time.