Assuming capital intensity ratio = 0.3 is a constant. Sales on 12/31/2021 income statement = $1,000 M Net Income on 12/31/2021 income statement = $100 M Retention ratio = 20% Payable + Accruals on 12/31/2021 balance sheet = $ 200 M g = target growth rate in sales = 10% What is the self supporting growth rate in 2022? 10% 20% 25% 30%
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Therefore, we can calculate the equity as follows: Equity = Total assets - Total liabilities = Sales / Capital intensity ratio - Total liabilities Given that the sales on the income statement are $1.000M and the capital intensity ratio is 0.3, we can calculate Show more…
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