Major Manuscripts, Inc. 2012 Income Statement Net sales $ 8,600 Cost of goods sold 7,550 Depreciation...

Major Manuscripts, Inc. 2012 Income Statement Net sales $ 8,600 Cost of goods sold 7,550 Depreciation 310 Earnings before interest and taxes $ 740 Interest paid 40 Taxable Income $ 700 Taxes 280 Net income $ 420 Dividends $ 194 Major Manuscripts, Inc. 2012 Balance Sheet 2012 2012 Cash $ 2,420 Accounts payable $ 2,320 Accounts rec. 960 Long-term debt 280 Inventory 2,800 Common stock $ 2,400 Total $ 6,180 Retained earnings 4,580 Net fixed assets 3,400 Total assets $ 9,580 Total liabilities & equity $ 9,580 Major Manuscripts, Inc., is currently operating at 70 percent of capacity. All costs and net working capital vary directly with sales. The tax rate, the profit margin, 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? Multiple Choice $137 $369 $232 $618 $249

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