Planners Have Determined That Sales Will Increase by 20% Next

question 46

Multiple Choice

Planners have determined that sales will increase by 20% next year,and the profit margin will remain at 10% of sales.Which one of the following statements is correct if the payout ratio remains at 30%?

• A) Net income will increase by 10% next year.
• B) The addition to retained earnings will increase by 20% next year.
• C) The dividend will increase by 6% next year.
• D) The addition to retained earnings will equal 6% of the sales increase next year.

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Definitions:

Cognitive Development

The process of growth and change in intellectual capabilities that occurs from infancy, through childhood, and onto adulthood.

Erik Erikson

A psychoanalyst known for his theory on the psychosocial development of human beings, encompassing eight stages from infancy to adulthood.

Sigmund Freud

An Austrian neurologist best known for founding psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Lawrence Kohlberg

A psychologist best known for his theory of stages of moral development.