Ribbon Industries reported sales of $3 million and net income of $400,000 for 2010. The retained

earnings balance at the end of 2012 is $7 million. Ribbon Industries has a dividend payout ratio of
30%.

If sales are expected to increase by 25% next year, what will be the projected balance in
retained earnings using the percent of sales method?
A) $7,350,000 B) $6,720,000 C) $7,280,000 D) $8,750,000

C

Business

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Indicate whether the statement is true or false

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