A Firm Has Net Income of $32,000 on Sales of $190,000.Sales

question 103

Multiple Choice

A firm has net income of $32,000 on sales of $190,000.Sales are expected to increase by 6 percent next year and the dividend payout ratio is 35 percent.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) $14,300
• B) $15,400
• C) $15,686
• D) $17,550
• E) $22,048

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Definitions:

Global Strategies

Plans developed by organizations to operate and compete in an international market or across different cultures and economies.

Domestic Corporations

Companies that are incorporated under the laws of a particular country and conduct business primarily within that country.

Pressures For Change

External and internal forces that drive or necessitate organizational change, including technological advancements, market dynamics, and internal performance issues.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, often leading to increased connectivity and interdependence of the world's markets and businesses.