Assume that Fake Stone, Inc. is operating at full capacity. Also assume that all costs, net working capital, and fixed assets vary directly with sales. The debt-equity ratio and the dividend payout ratio are constant. What is the pro forma net fixed asset value for next year if sales are projected to increase by 7.5 percent?
A. $19,800
B. $21,070
C. $23,600
D. $24,240
E. $26,810
Ans: B. $21,070
Business
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