Major Manuscripts, Inc.
2012 Income Statement Net sales $ 8,500 Cost of goods sold 7,215 Depreciation

280 Earnings before interest and taxes $ 1,005 Interest paid

66 Taxable Income $ 939 Taxes

367 Net income

$

572 Dividends $ 201

Major Manuscripts, Inc.
2012 Balance Sheet 2012 2012 Cash $ 3,100 Accounts payable $ 2,250 Accounts rec. 950 Long-term debt 370 Inventory

3,400 Common stock $ 3,800 Total $ 7,450 Retained earnings

5,130 Net fixed assets

4,100 Total assets

$

11,550 Total liabilities & equity

$

11,550

Major Manuscripts, Inc., is currently operating at maximum capacity. All costs, assets, and current liabilities vary directly with sales. The tax rate and the dividend payout ratio will remain constant. How much additional debt is required if no new equity is raised and sales are projected to increase by 10 percent? $522 $892 $169 $152 $408

please post how you get the answer. thanks

 

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